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BOARD of SUPERVISORS J]^ )*) San Francisco 94102^1689
Tel. No. 554-5184
Fax No. 554-5163
\^ ?%£!/ TDD/TTY No. 544-5227
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» j NOTICE OF CANCELLED MEETINGS
,Jz7/00 FINANCE AND LABOR COMMITTEE
*-W^ £AN FRANCISCO £OARD OF SUPERVISORS
1/3/c,
NOTICE IS HEREBY GIVEN that the meetings of the Finance and Labor Committee
scheduled for Wednesday, December 27, 2000, and Wednesday, January 3, 2001, at
10:00 a.m., at 1 Dr. Carlton B. Goodlett Place, Room 263, City Hall, San Francisco,
California, have been cancelled.
Gloria L. Young, Clerk of the Board
DOCUMENTS DEPT.
DEC 2 0 2000
SAN FRANCISCO
PUBLIC LIBRARY
POSTED: DECEMBER 19. 2000
Cancelled Meeting Nobce/Ad 1/21/00
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City Hall
\'£\ Dr. Carlton B. Goodlett Place. Room 244
San Francisco 94102-4689
Tel. No. 554-5184
Fax No. 554-5163
tX \/Ts^^^v/ TDD/TTY No. 544-5227
•/
NOTICE OF CANCELLED MEETING
1//0/0I
t**c*/J PINANCE AND LABOR COMMITTEE
£AN FRANCISCO BOARD OF SUPERVISORS
NOTICE IS HEREBY GIVEN that the meeting of the Finance and Labor Committee
scheduled for Wednesday, January 10, 2001, at 10:00 a.m. at 1 Dr. Carlton B. Goodlett
Place, Room 263, City Hall, San Francisco, California, has been cancelled.
Gloria L. Young, Clerk of the Board
°°CUMENTS OEPT
JAN- 8 2001
ueuc librarv
Cancelled Meeting Notice Ad
I IN VNCE AND LABOR COMMITTEE
S.F. BOARD OF SUPERVISORS
CITY HALL. ROOM 244
I DR CARLTON GOODLETT PLACE
SAN FRANCISCO. CA 94102-4
IMPORTANT HEARING NOTICE!!!
41 l.ibran
100 l.arkin Street Govt Information < enter
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City and County of San Francisco
Meeting Minutes
Finance and Labor Committee
Members: Supervisors Leland Yee, Tom Ammiano and Mark Leno
Clerk: Gail Johnson
City Hall
1 Dr. Carlton B.
Goodlett Place
San Francisco, CA
94102-4689
Wednesday, January 17, 2001
10:00 AM
Regular Meeting
City Hall, Room 263
Members Present: Leland Y. Yee, Tom Ammiano, Mark Leno.
MEETING CONVENED
The meeting convened at 10:08 a.m. Board President Ammiano appointed Supervisor Leno to serve on the
Finance and Labor Committee for today's meeting.
002191 [Contract for Electric Service, Treasure Island and Yerba Buena Island]
Resolution approving the contract between the City and County of San Francisco and the United States,
through the Department of Energy Western Area Power Administration, for the delivery of low cost electric
power for use at Treasure Island on file with the Clerk of the Board of Supervisors File No. 002 191; and
approving indemnifying and holding harmless the United States against claims arising from the activities of the
City under the contract; and waiving requirement of Section 21.35 of the San Francisco Administrative Code
that every contract contain a statement regarding liability of claimants for submitting false claims; and waiving
requirement of Section 21.19 of the San Francisco Administrative Code that every contract contain a statement
regarding guaranteed maximum costs. (Public Utilities Commission)
(Fiscal impact.)
12/13/00, RECEIVED AND ASSIGNED to Finance and Labor Committee.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Maria Jurosek, Director of Retail Ser\>ices,
Public Utilities Commission; Richard Robinson, McMillan Drop-In Center.
RECOMMENDED by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
City and County of San Francisco
Printed at S." // I'M <•» i 3 HJ
Finance and Labor Committee Meeting Minutes January 17, 2001
001796 |Creating a Special Assistant XVI position at the Board of Appeals, while Director is on medical leave|
Ordinance appropriating 5105,065 from the General Fund Reserve to fund the salary and fringe benefits of a
Special Assistant XVI at the Board of Appeals, while Director is on medical leave and operating expenses, and
amending Annual Salary Ordinance for fiscal year 2000-01. (Controller)
(Companion measure to File 001797.)
1 1/22/00, RECEIVED AND ASSIGNED to Finance and Labor Committee
1 2/1 3/00, SUBSTITUTED. Substituted by Controller 1 2/1 3/00, bearing new title.
12/13/00, ASSIGNED to Finance and Labor Committee
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Linda Avery, Acting Executive Secretary,
Board of Appeals. Amended as follows : On page I, lines 2, 14 and 25, by replacing "$105,065" with
"$73,364"; on line 6, by adding "placing $36,682 on reserve"; on line 18, by replacing "$52,184" with
"$49,972"; on line 20, by replacing "$20,919" with "$9,415"; on line 22. by replacing "$14,302" with
"$1 1,494"; on line 23, by replacing "$7,660" with "$2,483 " Further amended on page 2 by adding the
following: "Section 3. Funds in the amount of $36,682 are hereby placed on reserve for three months, to be
released by the Finance and Labor Committee. " New title.
AMENDED.
Ordinance appropriating $73,364 from the General Fund Reserve to fund the salary and fringe benefits of a
Special Assistant XVI at the Board of Appeals, while Director is on medical leave and operating expenses, and
amending Annual Salary Ordinance for fiscal year 2000-01; placing $36,682 on reserve. (Controller)
(Companion measure to File 001797.)
RECOMMENDED AS AMENDED by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
001797 [Public Employment, Board of Appeals|
Ordinance amending Ordinance No. 181-00 (Annual Salary Ordinance, 2000'01 ) reflecting the creation of one
position at the Board of Appeals. (Human Resources Department)
(Companion measure to File 001796.)
1 1/22/00, RECEIVED AND ASSIGNED to Finance and Labor Committee
12/13/00, SUBSTITUTED. Substituted by Human Resources Department 12/13/00. bearing same title.
12/13/00, ASSIGNED to Finance and Labor Committee.
Heard in Committee. Speakers: Harvey Rose. Budget Analyst; Linda Avery. Acting Executive Secretary.
Board of Appeals.
RECOMMENDED by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
O'.v and County of San Francisco 2 Primed at 5: 1 1 PM on J J M
Finance and Labor Committee
Meeting Minutes
January 17, 2001
002087 [Fund litigation and mediation expenses for VIACOM, AT&T, and TCI appeals for the Assessor's
Office]
Ordinance appropriating $1,245,909 of the General Reserve-Litigation to fund the litigation and mediation
expenses associated with the VIACOM, AT&T, and TCI appeals and development and implementation of
reengineering plan for the Assessor's Office for fiscal year 2000-01. (Controller)
(Fiscal impact.)
1 1/20/00, RECEIVED AND ASSIGNED to Finance and Labor Committee.
12/1/00, SUBSTITUTED. From Controller, Funding Sources on page 1 , line 13 should have reflected "G" for grant funded; same title.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Doris Ward, Assessor; Edward Harrington,
Controller. Amended on page 2, lines 7 and 15, by replacing "$223,887" with "$176,297." After further
consideration, the legislation was divided into two separate pieces. See File 010108.
AMENDED.
DIVIDED.
Ordinance appropriating $471,593 of the General Reserve to fund the litigation and mediation expenses
associated with the VIACOM, AT&T, and TCI appeals for the Assessor's Office for fiscal year 2000-01.
(Controller)
(Fiscal impact.)
RECOMMENDED AS DIVIDED by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
010108 [Fund the development and implementation of Reengineering Plan for the Assessor's Office Efficiency
Program]
Ordinance appropriating $726,726 of the General Reserve to fund the implementation of Reengineering Plan.
for the Assessor's Office for fiscal year 2000-01. (Assessor-Recorder)
(Supervisor Leno dissenting in Committee.)
Divided from File 002087.
CONTINUED TO CALL OF THE CHAIR by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
City and County of San Francisco
Printed at >:U PH on I ' II J
Finance and Labor Committee Meeting Minutes January I 7, 2001
002184 |Funding for operating costs and implementation of a State required Customer Service Unit|
Ordinance appropriating $839,562 to support both continuing operating costs and the implementation of a State
required Customer Service Unit ($594,262 for Child Support Service Division and $245,300 for CSS Cases
Consortium) and the creation of two positions at the Department of Child Support for fiscal year 2000-01 .
(Controller)
(Fiscal impact; Companion measure to File 002183.)
12/13/00, RECEIVED AND ASSIGNED to Finance and Labor Committee
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Milton Hyams. Acting Director, Department of
Child Support Services. Amended on page 1 asfollows: On line 2, by replacing "$839,562" with "780.837";
on line 3, by replacing "$594,262" with "$535,537"; on line 5. by adding "ratifying action previously taken ",
on line 15, by replacing "$392,214" with "$353,455"; on line 18. by replacing "$202,048" with "$182,082";
on line 22, by replacing "$85,416" with "$53,385"; on line 24. by replacing "$21,354" with "$13,346".
Amended on page 2 asfollows: On line 16, by replacing "$144,945" with "$126,259"; and on line 18. by-
replacing "$839,562" with "780,837". Amended on page 3 by adding the following: "Section 3. The
Department of Child Support Sen'ices shall eliminate the two 8204 Institutional Police Officer positions as
soon as each position becomes vacant. " Further amended on page 3 by adding Section 4 to provide for
ratification of action previously taken. New title
AMENDED.
Ordinance appropriating $780,837 to support both continuing operating costs and the implementation of a State
required Customer Service Unit ($535,537 for Child Support Service Division and $245,300 for CSS Cases
Consortium) and the creation of two positions at the Department of Child Support for fiscal year 2000-01;
ratifying action previously taken. (Controller)
(Fiscal impact; Companion measure to File 002183.)
RECOMMENDED AS AMENDED by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
002183 [Creating two (2) positions in Child Support Scrviccs|
Ordinance amending Ordinance No. 181-00 (Annual Salary Ordinance, 2000/01 ) reflecting the creation of two
positions in Child Support Services. (Human Resources Department)
(Fiscal impact; Companion measure to File 002184.)
12/13/00, RECEIVED AND ASSIGNED to Finance and Labor Committee
Heard in Committee. Speakers: Harvey Rose. Budget Analyst: Milton Hyams. Acting Director. Department of
Child Support Sen'ices.
RECOMMENDED by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
City and County- of San Francisco 4 Printed at 5:12 P\1
Finance and Labor Committee
Meeting Minutes
January 17, 2001
001251 [Reserved Funds, Department of Public Health]
Hearing to consider release of reserved funds, Department of Public Health (Fiscal Year 2000-2001 Budget),
in the amount of $1,233,854, to fund the San Francisco General Hospital-Department of Psychiatry Acute
Inpatient Service. (Public Health Department)
12/6/00, RECEIVED AND ASSIGNED to Finance and Labor Committee.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Ken Bruce, Budget Analyst's Office; Monique
Zmuda, Chief Financial Officer, Department of Public Health. Release of reserved funds in the amount of
$1,233,854 approved.
APPROVED AND FILED by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
002187 [Contract between the Dept. of Public Health and Health Advocates, LLP to provide uncompensated
care recovery services]
Resolution authorizing the Director of Public Health and the Purchaser to execute a contract between the City
and County of San Francisco and Health Advocates, LLP to provide uncompensated care recovery services.
(Public Health Department)
12/13/00, RECEIVED AND ASSIGNED to Public Health and Environment Committee.
12/28/00, TRANSFERRED to Finance and Labor Committee. At the request of the President, this matter is to be scheduled for the
January 10, 2001 meeting.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Monique Zmuda, Chief Financial Officer,
Department of Public Health; Steve Reid, President, Paralign; Diane Sovereign (attorney); Linda Safir,
Director of Sales, Paralign; Karla Fine, Manager, Paralign; Fanny Mayorga, Paralign; Juan Sosa, Paralign;
Helen Lim, Paralign; Robert McCarthy (registered to speak for Paralign); Al Leibovic, Health Advocates;
Theodore Lakey, Deputy City Attorney; Edward Harrington, Controller.
Continued to January 31, 2001.
CONTINUED by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
002185 [Lease of property for DPH-Health Promotion and Prevention Unit currently located at 101 Grove
Street, to alleviate overcrowding]
Resolution authorizing the lease of 1 1,125 square feet at 30 Van Ness Avenue for the Department of Public
Health. (Public Health Department)
(Fiscal impact.)
12/13/00, RECEIVED AND ASSIGNED to Finance and Labor Committee.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Anthony Delucchi, Director of Property. Real
Estate Department.
RECOMMENDED by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
City and County of San Francisco
Printed at 5:12 PM on I MM
Finance and Labor Committee Meeting Minutes January I ", 2001
002145 [S. F. International Airport Advertising Program Lease|
Resolution approving San Francisco International Airport Advertising Program Lease between Transportation
Media, Inc. (a division of Eller Media) and the City and County of San Francisco, acting by and through its
Airport Commission. (Airport Commission)
1 2/6/00, RECEIVED AND ASSIGNED to Finance and Labor Committee
Heard in Committee. Speakers; Harvey Rose, Budget Analyst; Cathy Widener, Governmental Affairs
Administrator, Airport.
Continued to January 31, 2001.
CONTINUED by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
001252 |Rescrved Funds, Port of San Francisco]
Hearing to consider release of reserved funds, Port of San Francisco (San Francisco Harbor Operating Funds,
File 101-96-19, Ordinance No. 470-96), in the amount of $460,000 for Piers 48 and 50 Fire Protection project.
(Port)
12/5/00, RECEIVED AND ASSIGNED to Finance and Labor Committee
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Imani Haygood, Port Release of reserved
funds in the amount of $460,000 approved
APPROVED AND FILED by the following vote:
Ayes: 2 - Yee, Leno
Absent: 1 - Ammiano
002163 [Contracting out City services]
Mayor
Resolution concurring with the Controller's certification that assistance to certain victims of crime and
education in community anti-street violence can be practically performed for the District Attorney's Victim
Witness Assistance Program by a private contract for a lower cost than similar work services performed by
City and County employees.
12/1 1/00, RECEIVED AND ASSIGNED to Finance and Labor Committee
Heard in Committee. Speaker: Harvey Rose. Budget Analyst Amended on page 1, line 2, after "concurring. "
and on page 2. line 4, after "concurs, " by adding "retroactively "
AMENDED.
Resolution concurring, retroactively, with the Controller's certification that assistance to certain victims of
crime and education in community anti-street violence can be practically performed for the District Attorney's
Victim Witness Assistance Program by a private contract for a lower cost than similar work services performed
by City and County employees.
RECOMMENDED AS AMENDED by the following vote:
Ayes: 2 - Yee, Leno
Absent: 1 - Ammiano
City and County of San Francisco 6 Printed at 5:1? PW or } 3 i •'-
Finance and Labor Committee
Meeting Minutes
January 1 7, 2001
002186 [Option to extend lease at One Market Plaza (Steuart Tower, Second Floor) for Dept. of
Telecommunications and Information Services]
Resolution authorizing the exercise of option regarding an extension of a real property lease at One Market
Plaza, on behalf of the Department of Telecommunications and Information Services. (Real Estate Department)
(Fiscal impact.)
1 2/1 3/00, RECEIVED AND ASSIGNED to Finance and Labor Committee. Sponsor requests that this item be scheduled for the January
10, 2001, meeting. Item needs to be considered as soon as possible.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Anthony Delucchi, Director of Property, Real
Estate Department.
RECOMMENDED by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
002217 [Reserved Funds, Police Department]
Hearing to consider release of reserved funds, Police Department (Fiscal Year 2000-01 Budget), in the amount
of $4,297,098 to defray overtime costs. (Police Department)
12/20/00, RECEIVED AND ASSIGNED to Finance and Labor Committee.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst: Captain John Goldberg, Police Department,
Fiscal Division. Release of reserved funds in the amount of $4,297,098 approved.
APPROVED AND FILED by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
ADJOURNMENT
The meeting adjourned at 12:29 p.m.
City and County of San Francisco
I'rinlc.Ul hll I'M M I I 04
3
\ln/o\
[Budget Analyst Report]
Susan Horn
Main Library-Govt. Doc. Section
CITY AND COUNTY
OF SAN FRANCISCO
DOCUMENTS DEPT
^OARD OF SUPERVISORS
JAN t 1 2001
BUDGET ANALYST
1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-76§j?N FRANClSCO
FAX (415) 252-0461 DBL,C L'BRARY
r
January 11, 2001
TO: 'Finance and Labor Committee
FROM: Budget Analyst
SUBJECT: January 17, 2001 Finance and Labor Committee Meeting
Item 1 - File 00-2191
Department:
Item:
Electric Service
Provider:
Public Utilities Commission (PUC)
Resolution approving tbe contract between tbe City and
County of San Francisco and the United States, through
the Department of Energy Western Area Power
Administration, for the delivery of low cost electrical
power for use at Treasure Island; and approving,
indemnifying, and holding harmless the United States
against claims arising from the activities of the City
under the contract; and waiving the requirement of
Section 21.35 of the San Francisco Administrative Code
that every contract contain a statement regarding liability
of claimants for submitting false claims; and waiving the
requirement of Section 21.19 of the San Francisco
Administrative Code that every contract contain a
statement regarding guaranteed minimum costs.
Administrator, Western Area Power Administration,
United States Department of Energy (WAP A)
Memo to the Finance aiid Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Term of Contract:
January 1, 2005 to December 31, 2024 (20 year term).
According to Ms. Maria Jurosek of the PUC, this contract
is being prepared four years in advance of its
commencement date in order to comply with WAPA's
contracting timeline to secure the continuation of WAPA
electric service provision for twenty years after January 1,
2005. Ms. Jurosek states that, by law, Federal preference
hydropower (including the electrical power generated by
WAPA) must be sold at cost and only for authorized uses.
The development of Treasure Island1 is such an
authorized use.
Cost Payable by the
City to the United
States Department of
Energy: Up to a maximum of $20,000,000, at an average of
$1,204,500 per year over the 20 year term of the proposed
contract (see Comment No. 3).
Source of Funds:
Description:
Proceeds of the sale of electrical power to Treasure Island
tenants. These proceeds are held by the Treasure Island
Development Authority. According to Ms. Eila Arbuckle
of the Treasure Island Development Authority, the
Treasure Island Development Authority is self-supporting
through facility rentals.
The City is currently providing operations and
maintenance services at Treasure Island, initially under a
multi-year Cooperative Agreement with the U.S. Navy.
The Cooperative Agreement with the Navy was approved
by the Board of Supervisors in August of 1997 (File 244-
97-4). Ms. Arbuckle states that the bulk of Navy financial
support expired on September 30, 2000, with ongoing
minimal funding of $145,000 for caretaking services
provided until September 30, 2001. Ms. Arbuckle further
states that the Treasure Island Development Authority
has issued a Request for Qualifications for a primary
developer for Treasure Island and a selection is due to be
made by June 30, 2001, at which time the City expects to
acquire the title to former Treasure Island Naval Station
1 All references to Treasure Island in the proposed contract and this report also refer to the
adjoining Yerba Buena Island.
BOARD OF SUPERVISORS
BUDGET ANALYST
2
Memo to the Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
and transfer management responsibility to the selected
"developer. Una ef the Federal Base Closure and
Realignment Act, the City is the local reuse authority for
the Treasure Island Naval Station. As the local reuse
authority, the City has acted as the entity focused on the
planning, redevelopment, reconstruction, rehabilitation,
reuse, and conversion of the Treasure Island Naval
Station for the public interest, convenience, welfare, and
common interest of the citizens of San Francisco. Since
October 1, 1997, the PUC has been providing electrical
power to Treasure Island, initially purchasing WAPA
electrical power through the Navy, and then purchasing
WAPA electrical power directly under the PUC's existing
contract with WAPA, as explained below.
Under the Federal Base Closure and Realignment Act,
the United States Department of Energy makes low-cost
Federal electrical power available to support economic
development for the conversion of military bases.
Between October 1, 1997 and September 29, 1998, the
Navy purchased such Federal electrical power from
WAPA on behalf of the PUC in order to supply electrical
power to Treasure Island. On October 7, 1998, the Board
of Supervisors approved a contract between the City and
the United States Department of Energy which enabled
the PUC to purchase such power directly from WAPA in
order that the City could continue to receive the benefits
of the low cost Federal electrical power without having to
purchase it through the Navy (File 98-1776). This
contract came into effect on October 1, 1998 and is due to
expire on December 31, 2004.
Approval of the subject resolution would enable the City
to continue purchasing low cost Federal National Defense
Authorization Act electrical power for Treasure Island for
an additional 20 years.
Comments: Cost
1. WAPA would provide electrical power to the City on a
"take-or-pay basis." Under this arrangement, the City
would be obligated to pay for its percentage share of the
costs related to WAPA's generation of electrical power,
whether or not the City uses its full allocation of electrical
BOARD OF SUPERVISORS
BUDGET ANALYST
3
Memo to the Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
power. According to Ms. Jurosek and Mr. Joe Como of the
"City Attorney s~Offi.ce, the City's allocation is 0.17264
percent of WAPA's total electrical power generation,
based on (a) the percentage of WAPA resources provided
to the Navy at the Treasure Island Naval Station prior to
its closure, and (b) a small additional percentage of power
which WAPA has determined that each of its customers
could use in the future2. The City would pay for that
allocation of electrical power in accordance with a
schedule of rates determined by the United States
Department of Energy5. The subject contract provides for
an exchange program whereby the City could make any
unusable portion of its WAPA electrical power allocation
available to other WAPA customers. The City would be
reimbursed at a "pool energy rate" determined by the
United States Department of Energy. Any electrical
power not consumed by WAPA customers could be
provided by WAPA to the open market. Revenues
collected by WAPA from the open market would be
credited to the customers up to the "pool energy rate", and
any revenues in excess of that rate would be retained by
WAPA4.
2. According to Ms. Jurosek, the peak electric demand on
Treasure Island is currently 3 megawatts of electrical
power and growing. Under the proposed contract, the
initial WAPA allocation is between 3 and 5 megawatts of
electrical power. The peak demand for electrical power
upon completion of development on Treasure Island is
unknown, but depending on the development concepts
2 The subject contract provides for the City's percentage to be adjusted on January 1, 2015, as part
of the United States Department of Energy's establishment of a 2015 Resource Pool for new power
allocations. Any reallocations would be based on WAPA customers' actual electrical power usage in
2015. Ms. Jurosek states that this action in 2015 would represent a mid-term reallocation of
resources based on actual usage.
3 The United States Department of Energy can change the rates unilaterally, but its customers can
terminate the services being charged at the new rates within two years of the effective date of the
rate change (so long as they provide written notice of their intention to terminate within 90 days of
the effective date of the new rate). Ms. Jurosek advises that this minimizes the City's risk if
electrical power provided by WAPA at some point becomes more expensive than other options.
However, even if the City terminates WAPA's services, the City would still be required to pay at the
new rate for services consumed after the effective date of the rate change.
4 According to Ms. Jurosek, while the City currently pays for more WAPA power than it actually
uses on Treasure Island under the "take-or-pay basis" of the current WAPA contract, the City has
been reimbursed at a "pool energy rate" for that portion of its electrical power allocation which it has
not used but instead made available to other WAPA customers, or to the open market.
BOARD OF SUPERVISORS
BUDGET ANALYST
4
Memo to the Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
actually constructed, the peak demand has been projected
to be as high as 20 megawatts of electrical power.
Ms. Jurosek states that the average cost of WAPA
electrical power over the 20 year term is projected to be
$50 per megawatt, based on an average 5 megawatt peak
demand over a one year period, at a 55 percent load factor
per year for 20 years. This would result in a projected
annual cost of approximately $1,204,500 per year5 which,
over 20 years, would exceed the $20,000,000 cap approved
by the Public Utilities Commission in its resolution of
November 14, 2000 (see Comment No. 3). By contrast, if
the City had to purchase that amount of electrical power
on the spot market at today's prices, it could cost
approximately $6,022,500 per year6, or $4,818,000 or 400
percent more per year than power purchased under the
proposed WAPA contract. Ms. Jurosek calculated the spot
market figure on the basis of the short term average price
for electrical power in December of 2000 of $250 per
megawatt hour, noting that power exhange prices spiked
as high as $1,500 per megawatt hour in December of
19997.
3. Ms. Jurosek advises that the estimated cost of
$1,204,500 per year for 20 years under the proposed
WAPA contract would total $24,090,000, which exceeds
the $20,000,000 cap approved by the Public Utilities
Commission in its resolution of November 14, 2000. Ms.
Jurosek states that the PUC will track its purchases
under the proposed WAPA contract and if it believes that
it will exceed the $20,000,000 cap, it will request approval
of an increase in that cap by the Public Utilities
Commission and the Board of Supervisors.
5 Ms. Jurosek calculates the figure of $1,204,500 as follows: 5 megawatts x 24 hours x 365 days x 55
percent average load factor = 24,090 megawatts x $50 = $1,204,500.
6 Ms. Jurosek calculates the figure of $6,022,500 using the same assumptions about electrical power
consumption on Treasure Island as above, as follows: 5 megawatts x 24 hours x 365 days x 55
percent average load factor = 24,090 megawatts x $250 - $6,022,500.
7 Ms. Jurosek notes, with regard to electrical power imported into California, that the highest price
at the California-Oregon border thus far in FY 2000-01 has been $4,500 per megawatt hour, and that
the highest price paid by Hetch Hetchy thus far in FY 2000-01 has been $800 per megawatt hour.
BOARD OF SUPERVISORS
BUDGET ANALYST
5
Memo to the Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Contract Details
4. Mr. Como states that the contract with the United
States Department of Energy requires that the City
indemnify and hold harmless the Federal Government
against claims arising from the activities of the City.
Therefore, this proposed resolution includes such an
indemnification provision. Mr. Como states that the
proposed indemnification provision poses minimal risk to
the City because the City is purchasing a commodity from
the Federal Government in the form of electrical power.
According to Mr. Como, under a commodity purchase
contract with the Federal Government, there is minimal
probability that the Federal Government would be
harmed by its contract to sell power to the City.
Therefore, according to Mr. Como, it is fair to say that
there is minimal risk to the City in indemnifying WAPA.
5. The Administrative Code requires all City contracts to
contain language regarding (a) a guaranteed maximum
cost under a contract (Section 21.19), and (b) the
consequences of submitting false claims to the City
(Section 21.35). The proposed resolution would waive
such requirements. According to Mr. Como, the United
States Department of Energy insists on using its standard
contract language for this contract and such language
does not include the provisions that are required by the
Administrative Code Sections 21.19 and 21.35.
According to Mr. Como, there is no need for a contract
maximum, as required by Section 21.19 of the
Administrative Code. In approving the contract, the
Public Utilities Commission has stipulated, in the PUC
resolution approved on November 14, 2000, that total
expenditures through the contract term ending on
December 31, 2024 shall not exceed $20,000,000. That
amount will be certified by the Controller. As the amount
is calculated on the basis of the maximum volumes
available to the City under the contract, greater
expenditures would not be possible, according to Mr.
Como.
With regard to Section 21.35 of the Administrative Code,
Mr. Como advises that, since the City is easily able to
BOARD OF SUPERVISORS
BUDGET ANALYST
6
Memo to the Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
verify the amounts of electrical power that are purchased
and the price per kilowatt hour is stipulated in the
contract, contract language regarding the consequences of
submitting false claims to the City is unnecessary
Recommendation: Approve the proposed resolution.
BOARD OF SUPERVISORS
BUDGET ANALYST
7
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Items 2 and 3 - Files 00-1796 and 00-1797
Note: This report is based on an Amendment of the Whole for both File 00-1796
and File 00-1797 submitted by the Board of Appeals, which will be
introduced at the January 10, 2001 Finance and Labor Committee Meeting.
The Amendment of the Whole reclassifies the proposed new position from
Special Assistant XV 1374L to Special Assistant XVI 1375L to reflect the
current Planning Department position held by the individual that has
assumed the duties of the Executive Secretary of the Board of Appeals.
Department: Board of Appeals
Items: Item 3 - File 00-1796: Ordinance appropriating $105,065
from the General Fund Reserve to fund the salary and fringe
benefits of a Special Assistant XVI at the Board of Appeals
while the Executive Secretary is on medical leave, operating
expenses and amending the Annual Salary Ordinance for FY
2000-01.
Amount:
Source of Funds:
Description:
Item 4 - File 00-1797: Ordinance amending No. 181-00
(Annual Salary Ordinance, 2000/01) reflecting the creation of
one 0.61 FTE Special Assistant XVI 1375 Limited duration
position at the Board of Appeals.
$105,065
General Fund Reserve
File 00-1796: The Board of Appeals (BOA) is requesting a
supplemental appropriation in the amount of $105,065 from
the General Fun Reserve to fund overtime salaries and a
0.61 FTE Special Assistant XVI 1375L Limited Duration
position and provide additional funds for an existing
Temporary Exempt 1426 Senior Clerk Typist position in the
BOA.
According to Ms. Catherine Johnson of the BOA, the BOA
Executive Secretary suffered a stroke and went on sick leave
on September 5, 2000. Ms. Johnson advises that since the
Executive Secretary's departure, the existing BOA staff have
been working overtime to ensure that the Appeal Hearings
would continue, as scheduled. Therefore, Ms. Johnson
advises that the BOA is requesting a supplemental
appropriation for overtime in the amount of $7,660 for the
period from September 18, 2000 through June 30, 2001, so
BOARD OF SUPERVISORS
BUDGET ANALYST
8
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
that the BOA staff can continue to staff the schedule Appeal
—Hearings (See Comment 5). — —
According to Ms. Johnson, the Executive Secretary is
currently on sick leave and is therefore still on the BOA
payroll. Ms. Johnson advises that Ms. Linda Avery from the
Planning Department became the BOA Acting Executive
Secretary on approximately November 29, 2000. In the
proposed ordinances, Ms. Avery's position is coded as a
Special Assistant XVI 1375L, a Limited Duration position
that is intended to terminate at the end of FY 2000-2001.
The proposed supplemental appropriation ordinance for
$105,065 designates $62,184 of the supplemental
appropriation for salary and $14,302 of the supplemental
appropriation for fringe benefits. Ms. Myrna Lopez of the
Mayor's Budget Office advises that the Special Assistant XVI
1375 L position was prorated to 0.61 FTE because the
Special Assistant XVI was intended to start as the Acting
Executive Director in late November of 2000 (see Comment
3).
According to Ms. Johnson, when the Executive Secretary
went on sick leave, the BOA had to increase the hours of its
existing 1426 As-Needed Senior Clerk Typist from part-time,
4 hours a day, to full-time, 8 hours a day, to help the BOA
handle its caseload. Ms. Johnson notes that when the Senior
Clerk Typist went to full-time, the BOA coded the position as
Temporary Exempt so that the employee would be eligible for
overtime pay. Ms. Johnson states that they will need to
continue to have a Temporary Exempt 1426 Senior Clerk
Typist full-time until the end of the fiscal year so that the
Temporary Exempt Senior Clerk Typist can assist the Acting
Executive Secretary in conducting the Appeal Hearings.
Therefore, the BOA is requesting additional Temporary
Salary funds for the Temporary Exempt 1426 Senior Clerk
Typist from October 14, 2000 through June 30, 2001 in the
amount of $20,919 (see Comment 4).
File 00-1797: The proposed ordinance would amend the
Annual Salary Ordinance to create the requested Special
Assistant XVI 1375L position. As noted above, the position
would be for a limited duration, terminating when the BOA
Executive Secretary returns from sick leave, which Ms.
Johnson anticipates would be at the beginning of FY 2001-
2002.
BOARD OF SUPERVISORS
BUDGET ANALYST
9
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Budget:
Comments:
The budget for the requested supplemental appropriation
(File 00-1796) is as follows:
Salary-Special Assistant XVI $62,184
Fringe Benefits-Special Assistant XVI 14,302
Temporary Salaries 20,919
Overtime 7,660
Total $105\065
1. According to Ms. Lopez, as reflected in the Amendment of
the Whole, Ms. Avery's position as Special Assistant XVI
1375 is at the same classification as her position in the
Planning Department. Ms. Avery advises that her title in
the Planning Department was Chief of Personnel/
Commission Secretary.
2. According to Ms. Lopez, Ms. Avery must be on the BOA
payroll in order for Ms. Avery to have the authority to handle
the purchasing, payroll and personnel matters for the BOA.
According to Mr. Costilino Hogan from the Planning
Department, Ms. Avery's position in the Planning
Department would be backfilled by Planning Department
employees during her absence, such that there would not be
sufficient salary savings to transfer to the Board of Appeals
to fully cover Ms. Avery's costs due to temporary promotions
and salary increases for existing Planning Department staff.
Furthermore, Ms. Lopez advises that, except on the initial
interim basis, Ms. Avery's salary and fringe benefits should
not be funded by the Planning Department's budget and then
transferred to the BOA's budget, because it would be a
conflict of interest to have the Planning Department pay for
the salary of the Executive Secretary of the BOA, since the
BOA is directly responsible for hearing appeals of permit
cases from the Planning Department.
3. According to Ms. Lopez, the Planning Department paid
Ms. Avery's salary on an interim basis from November 29
2000 through January 1, 2001. Ms. Lopez advises that a
requisition was approved on January 2, 2001 to transfer Ms.
Avery from the Planning Department to BOA, such that the
BOA can now begin paying Ms. Avery's salary and fringe
benefits as of the first week of January of 2001. The biweekly
compensation for a 1375 Special Assistant XVI ranges from
BOARD OF SUPERVISORS
BUDGET ANALYST
10
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
$3,162 to $3,844, or from $82,212 to $99,944 annually. Ms.
Avery is currently paid at tbe top step, or $99,944 annually.
Tberefore, tbe Budget Analyst notes tbat tbe proposed
supplemental appropriation for permanent salaries and
fringe benefits should be reduced to reflect the actual timing
of the proposed position from the end of November of 2000
through June 30, 2001, as originally proposed, to January 2,
2001 through June 30, 2001, as now intended and reflected
below:
Budget Analyst
Proposed Supplemental Recommended Recommended
Appropriation Request Amount Reductions
Funding Uses
Permanent Salary-Misc. Reg. (1375L Special Assistant XVI)
$62,184 $49,972 $12,212
Fringe Benefits
$14.302 $11.494 $2,808
Total
$76,486 $61,466 $15,020
4. The BOA total Temporary Salaries budget for Fiscal Year
2000-01 is $15,684. The Budget Analyst notes that through
December 8, 2000, the BOA expended $7,797 for Temporary
Salaries, leaving a remaining balance of $7,887 for
Temporary Salaries. The proposed Supplemental
Appropriation includes a request for $20,919 of additional
Temporary Salaries funds.
As previously noted, the requested $20,919 of Temporary
Salary funds were intended to pay an As-Needed Senior
Clerk Typist, to increase his hours from part-time (4 hours
per day) to full-time (8 hours per day), from October 14, 2000
through June 30, 2001. However, according to Ms. Avery, two
BOA Senior Clerk Typists recently left their positions at the
BOA, including the one As-Needed Senior Clerk Typist, who
was to receive the proposed increase in hours under the
subject Supplemental Appropriation. Ms. Avery advises that
one permanent Senior Clerk Typist left the BOA payroll on
December 8, 2000 and the other Senior Clerk Typist, who
was being paid with the Temporary Salary funds, left the
BOA payroll on December 20, 2000. Ms. Avery hopes to fill
BOARD OF SUPERVISORS
BUDGET ANALYST
11
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
those two positions by early to mid February of 2001.
Currently, according to Ms. Avery, the BOA has only one
remaining As-Needed Senior Clerk Typist, who is now
working four hours per day.
Given that the requested $20,919 was originally intended to
increase a part-time Senior Clerk Typist to full-time between
October 14, 2000 and June 30, 2001, that this Temporary
Senior Clerk Typist position was vacated on December 20,
2000, and that another Temporary As-Needed Senior Clerk
Typist is currently assisting the BOA four hours per day, the
Budget Analyst estimates that the BOA needs additional
requested Temporary Salary funds of $9,415 instead of
$20,919, resulting in the following recommended reductions:
Budget Analyst
Proposed Supplemental Recommended Recommended
Appropriation Request Amount Reductions
Temporary Salaries
$20,919 $9,415 $11,504
5. The BOA total Overtime budget for FY 2000-01 is $4,110.
The proposed request includes $7,660 for Overtime funds for
the period from September 18, 2000 through June 30, 2001.
However, the Budget Analyst notes that as of December 8,
2001, the BOA expended a total of $3,917 of Overtime funds!
leaving a remaining balance of $193.
Since December 8, 2000, Ms. Avery advises there has been
only one BOA hearing. According to Ms. Avery, no overtime
expenses were incurred at that BOA hearing. There are 17
hearings currently scheduled for the remainder of the fiscal
year. Based on discussions with Ms. Avery, assuming an
average of four hours of overtime are required per hearing, at
an hourly rate of $39.36, this would result in a total
remaining overtime cost of $2,676. Therefore, total additional
overtime costs of $2,483 are projected for the balance of the
fiscal year ($2,676 through June 30, 2001 less $193
remaining balance). The proposed supplemental
appropriation for Overtime should therefore be reduced as
follows:
BOARD OF SUPERVISORS
BUDGET ANALYST
1~2
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Budget Analyst
Proposed Supplemental Recommended Recommended
Appropriation Request Amount Reductions
Overtime
$7,660 $2,483 $5,177
Recommendations: 1. Amend the proposed Supplemental Appropriation
ordinance (File 00-1796) as follows:
Proposed Supplemental
Appropriation Reauest
Recommended
Amount
Budget Analyst
Recommended
Reductions
Funding Sources
General Fund Reserve
$105,065
$73,364
$31,701
Funding Uses
Permanent Salary-Misc. Reg. (1375L Special Assistant XVT)
$62,184 $49,972 $12,212
Fringe Benefits
$14,302
$11,494
$2,808
Temporary Salaries
$20,919
$9,415
$11,504
Overtime
$7,660
$2,483
$5,177
Total
$105,065
$73,364
$31,701
2. Approve the proposed ordinance (File 00-1796), as
amended, and approve the amendment to the Annual Salary
Ordinance (File 00-1797).
BOARD OF SUPERVISORS
BUDGET ANALYST
13
' Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Item 4 - File 00-2087
Department:
Item:
Amount:
Source of Funds:
Description:
Assessor-Recorder's Office
Ordinance appropriating $1,245,909 from the General Fund
Reserve to fund: (a) litigation and mediation expenses
associated with the Viacom assessment appeal ($223,887), (b)
litigation expenses for the AT&T/TCI assessment appeal
($215,000), (c) a contract with KPMG to design and implement
a reengineering plan for the Assessor-Recorder's Office for
Fiscal Year 2000-01 ($726,726), and (d) temporary salaries for
customer service at the Assessor-Recorder's Office ($80,296).
$1,245,909
General Fund Reserve
A. Viacom Assessment Appeal
The proposed supplemental appropriation of $223,887 would
fund legal and related expenses already incurred for the
assessment appeals process over a dispute with Viacom Cable,
Inc. According to Ms. Julie Van Nostern of the City Attorney's
Office, Viacom initially filed an appeal with the Assessment
Appeals Board in 1991, contesting both the assessed value of
Viacom's cable signal distribution system and the assessed
possessory interest taxes1 owed by Viacom to the City for the
years 1987 through 1991. Ms. Van Nostern advises that the
appeal was later extended to include the years 1987 through
1995. According to Ms. Van Nostern, Viacom had asked for a
$23,000,000 refund in possessory interest taxes paid by
Viacom to the City between 1987 and 1995. However, the City
maintained that the requested refund should be approximately
$12,000,000, plus accrued interest, for excess possessory
interest taxes paid by Viacom to the City during that time.
The City and Viacom agreed to mediate the dispute. Following
the mediation, the parties agreed to a "Stipulation for
Reduction in Assessed Values for 1987-1995" ("Stipulation"),
and submitted the Stipulation to the Assessment Appeals
Board. Ms. Van Nostern advises that the Assessment Appeals
1 Possessory Interest Taxes are levied on private companies that use publicly owned property. In this
particular instance, the City assesses possessory interest taxes on Viacom Cable's use of City streets
and rights of way to provide for the cable company's cable distribution system.
BOARD OF SUPERVISORS
BUDGET ANALYST
14
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Budget:
Board approved the Stipulation on September 13, 2000 and
reduced Viacom's assessment accordingly, resulting in a
refund (including interest) to Viacom from the City in the
amount of $19,967,286. Attachment I, provided by the City
Attorney's Office, contains a summary of the Stipulation.
According to Mr. Matthew Hymel of the Controller's Office, the
City paid the settlement of $19,967,286 in FY 2000-01 using
reserved Property Tax funds held for this purpose.
The additional costs already incurred for the Viacom
assessment appeal litigation and mediation as of October 31,
2000 are as follows:
Viacom Assessment Appeal
Litigation
Mediation
Total
Berliner and Kidder,
$13,835
$13,835
Appraiser of Intangible Properties
Diehl, Evans & Company, LLP,
$8,563
26,603
35,166
Auditor of Intangible Properties
Rutan & Tucker, Representing the City before
13.166
56,249
69,415
the Assessment Appeals Board
Freeland Cooper, Legal Advice
32,264
32,264
John Clifford,
13,750
13,750
Valuation of Possessory Interest
JAMS
58,851
58,851
Private Mediation Services
City Attorney Delivery and Copying Costs
606
606
Total
$21,729
$202,158
$223,887
Comments on
Viacom Appeal:
1. Ms. Bose Onyemem of the Assessor-Recorder's Office states
that the Assessor-Recorder's Office's FY 2000-01 budget
included $100,000 to pay for City expenses in the Viacom
appeal case. According to Ms. Onyemem, as of December 20,
2000, the Assessor-Recorder's Office had expended $52,410 of
the total allocated amount of $100,000, leaving a balance of
$47,590. Ms. Onyemem advises that the Assessor-Recorder's
Office is now requesting the subject supplemental
appropriation to fund $223,887, which the City already owes in
incurred expenses. Because the proposed $223,887
supplemental appropriation would fund costs that have
already been incurred without first obtaining Board of
Supervisors approval, the Budget Analyst recommends that
the proposed ordinance be amended to provide for retroactive
authorization. In addition, because the Assessor-Recorder's
Office still has $47,590 in its FY 2000-01 budget for the
BOARD OF SUPERVISORS
BUDGET ANALYST
15
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Viacom case, the Budget Analyst recommends that the
proposed ordinance be amended to reduce the supplemental
appropriation request for costs related to Viacom by $47,590
from $223,887 to $176,297. Ms. Van Nostern does' not
anticipate future costs related to the Viacom assessment
appeal.
2. According to Ms. Onyemem, the Board of Supervisors has
appropriated a total of $1,368,692 since FY 1997-98 for
litigation and mediation costs related to the Viacom
assessment appeal. Attachment II, provided by the Assessor-
Recorder's Office, contains a breakdown of the Assessor-
Recorder's actual costs by fiscal year.
Description: B. AT&T/TCI Avveal Litigation Expenses
On July 31, 1996, Telecommunications, Inc. (TCI) acquired
Viacom's interest in the City's Cable Television franchise. TCI
was subsequently taken over by AT&T on March 9, 1999.
According to Ms. Van Nostern, AT&T/TCI has appealed its
assessments for the years 1996 through 1999 to the
Assessment Appeals Board, contesting the assessed value of
more than $200 million in property. Ms. Van Nostern advises
that the parties agreed to stay these appeals pending
resolution of the Viacom case discussed above, but that either
party can reinstate the appeals on 270 days notice, meaning
that the City must be ready to prepare and present its case in
as little as nine month's notice. Ms. Van Nostern advises that
the City Attorney's Office is working with the Assessor-
Recorder's Office to develop an assessment strategy for
AT&T/TCI, which will avoid the costly litigation associated
with the Viacom case.
The proposed ordinance would appropriate $215,000 to fund
the estimated costs in FY 2000-01 of responding to the
AT&T/TCI legal appeal. Ms. Van Nostern advises that because
the AT&T/TCI assessment appeal is a new case, no funds were
included in the FY 2000-01 budget for the Assessor-Recorder's
Office, and no funds have been expended on this case in
previous fiscal years.
BOARD OF SUPERVISORS
BUDGET ANALYST
16
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Budget:
The estimated FY 2000-01 costs for the AT&T/TCI
assessment appeal process are as follows:
AT&T/TCI Assessment Appeal
Estimated
Costs
Rutan & Tucker — Outside Tax Counsel
320 hours times $225/hour
$72,000
Expenses
13.000
Subtotal
$85,000
Freeland Cooper — Outside Litigation/Mediation Counsel
65 hours times $295/hour
19,175
Expenses
825
Subtotal
$20,000
Diehl, Evans & Company, LLP - Valuation of Cable Companies
140 hours times $200/hour
28,000
Expenses
7.000
Subtotal
$35,000
John Clifford — Valuation of Possessory Interest
310 hours times $225/hour
69,750
Expenses
5.250
Subtotal
$75,000
Total
$215,000
Comments on
AT&T/TCI Case:
1. According to Ms. Van Nostern, the City Attorney's Office
based their FY 2000-01 cost estimates for the AT&T/TCI
assessment appeal process on the hours, legal advice and
assessment services required for the Viacom assessment
appeal process described above. Ms. Van Nostern advises that
the estimated $215,000 in costs for the AT&T/TCI case during
FY 2000-01 does not include costs for mediation or for
Assessment Appeals hearings, should they be necessary. Ms.
Van Nostern advises that if mediation or hearings are
required, the Assessor-Recorder's Office will include funds for
legal costs in the department's FY 2001-02 budget request.
2. According to Ms. Van Nostern, all of the firms listed in the
above budget were selected on a sole source basis, based upon
their expertise related to property assessment and the cable
industry.
BOARD OF SUPERVISORS
BUDGET ANALYST
17
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Description: C. Contract with KPMG for Reengineering Plan
The proposed supplemental appropriation for $726,726 would
expand an existing $400,000 contract with KPMG to develop
and implement a reengineering plan, for a total contract cost
of $1,126,726, for the Assessor-Recorder's Office for Fiscal
Year 2000-01. This reengineering plan analyzes the
department's work processes in order to identify changes the
department must make to run more effectively. Ms. Onyemem
advises that the Assessor-Recorder's Office originally
contracted with KPMG, in consultation with the Mayor's and
Controller's Offices, in June of 2000 to improve efficiencies in
the department. KPMG agreed to identify and re-engineer
process inefficiencies, conduct a training needs assessment,
provide necessary training, improve customer service and
help the department transition into a new computer system.
The Assessor-Recorder's Office included $400,000 in its FY
2000-01 budget for this KPMG contract. Ms. Onyemem
advises that the Assessor-Recorder's Office negotiated with
the Controller's Office to include this $400,000 contract within
a larger City contract with KPMG (discussed further in
Comment No. 3 below).
According to Ms. Onyemem, in September of 2000, and again
in October of 2000, the Assessor-Recorder's Office requested
that KPMG revise and expand the scope of its work plan in
the three ways listed below. The Budget Analyst notes that
the Assessor-Recorder's Office did have authority to request
from KPMG proposals for expanding the scope of the existing
$400,000 contract. However, the Assessor-Recorder's Office
did not have the authority to finalize the expanded contract
discussed below without first obtaining approval from the
Board of Supervisors of this subject additional appropriation
of $726,726.
(1) After KPMG and the Assessor-Recorder's Office agreed to
the terms of the original $400,000 contract, in September of
2000 the Assessor-Recorder's Office directed KPMG to help
manage and facilitate the reduction of the department's
backlog in processing deeds, a priority for the Assessor-
Recorder's Office.2 In addition, KPMG proposed to expand
2 According to Ms. Onyemem, the Assessor-Recorder's Office experienced a total backlog of
approximately 32,000 deeds during 1999 and 2000. Ms. Onyemem advises that the transition to the
department's new computer system delayed the processing of new deeds. The Assessor-Recorder's
BOARD OF SUPERVISORS
BUDGET ANALYST
13
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
the original contract to provide a more extensive
reengineering plan and performance measures for the
department. The proposed expanded work plan would
expand the original contract by $207,926, from $400,000 to
$607,926.
(2) In October of 2000, KPMG agreed to expand the scope of its
contract with the Assessor-Recorder's Office for additional
fees to KPMG of $172,664, which would increase the
contract again from $607,926 to $780,590. This expanded
scope focuses on developing a new management strategy
and reorganizing the department.
(3) Finally, the Assessor-Recorder's Office has a proposal from
KPMG to implement the reengineering plan at. a cost of
$346,136, which would bring the total cost of the contract
with KPMG to $1,126,726.
These three modifications result in the total subject request of
$726,726 in additional costs for the contract with KPMG. A
summary budget for the total proposed contract costs of
$1,126,726 with KPMG is as follows:
SUMMARY
Reengineering Plan
Original Budget
Expanded Scope/Deed Backlog
$400,000
207,926*
Revised Subtotal
$607,926
Expanded Scope/Management Plan
Implementation of Reengineering Plan
172,664*
346,136*
Total Contract Costs
$1,126,726
*Total of $726,726, which is the subject of this request.
The proposed $726,726 supplemental appropriation would fund:
(a) KPMG's work decreasing the backlog in processing deeds
($207,926), (b) the expanded scope of KPMG's reengineering
plan for the department ($172,664), and (c) implementation of
the reengineering plan ($346,136), for a total FY 2000-01
contractual services costs of $1,126,726, including the original
budget of $400,000, as shown in the table above. As shown in
the table on the following page, the hourly rage being charged
by KPMG ranges from $121.28 to $281.14.
Office, with the assistance of KPMG, is now working to correct inaccurate deed information and
process or re-process deeds from 1999 and 2000.
BOARD OF SUPERVISORS
BUDGET ANALYST
19
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Budget for
Reengineering Plan:
The budget for the proposed $1,126,726 contract with
KPMG, including the subject $726,726 supplemental
appropriation, is as follows:
Contract with KPMG
Hourly
Number
Total
Rate
of Hours
Reengineering Plan
Professional Fees
Managing Director
$281.14
32
8,997
Project Manager
$165.38
418
69,129
Senior Consultants
$148.84
408
60,727
Consultants .
$148.84
492
73,229
Analysts
$148.84
504
75,016
Sub-contractor
Subtotal Professional Fees
$121.28
36
4,366
1,890
$291,464
Deed Backlog Completion
Professional Fees
Managing Director
$281.14
8
2,249
Project Manager
$165.38
422
69,790
Senior Consultants
$148.84
904
134,551
Analysts
Subtotal Professional Fees
$148.84
144
21,433
1,478
$228,023
Total Professional Fees
3,368
519,487
KPMG's Other Expenses*
88,439
**Subtotal Reengineering/Backlog
3,368
$607,926
Expanded Scope/Management Plan
Professional Fees
Managing Director
$281.14
240
$67,474
Project Manager
$165.38
320
52,922
Senior Consultants
Subtotal Professional Fees
$148.84
200
29,768
760
$150,164
KPMG's Other Expenses
22,500
**Subtotal Management Plan
760
$172,664
Estimates for
Implementation of Reengineering Plan
Professional Fees
Managing Director
$281.14
200
$56,228
Project Manager
$165.38
400
66,152
Senior Consultants
$148.84
400
59,536
Analysts
Subtotal Professional Fees
$148.84
800
119.072
1,800
$300,988
KPMG's Other Expenses
45,148
Subtotal Implementation Estimates
1,800
$346,136
Total KPMG Contract
5,928
$1,126,726
Less $400,000 included in FY 2000-01 Budget
(400,000)
Total Supplemental Appropriation
$726,726
Other Expenses include mileage, parking, meals and housing.
* Already expended or incurred (See Comment No. 1 below).
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Attachment V, provided by the Assessor-Recorder's Office,
contains an explanation for how KPMG estimated the
$346,136 shown in the budget above to implement the
reengineering plan.
Comments on
Reengineering Plan: 1. Ms. Onyemem reports that as of October of 2000, the
Assessor-Recorder's Office had already incurred expenses for
$387,497 of the $400,000 included in the department FY
2000-01 budget for the KPMG contract, leaving a balance of
$12,503. According to Ms. Onyemem, the Assessor-Recorder's
Office has continued incurring expenses for services provided
by KPMG since October of 2000, although the Assessor-
Recorder's Office is unsure of the exact amount of these
additional fees since the department has not received a bill
from KPMG since October of 2000. The Budget Analyst notes
that, according to Ms. Onyemem, KPMG has agreed to
complete its reengineering plan and its work to reduce the
deed backlog by January 31, 2001, at which time the
Assessor-Recorder's Office will owe to KPMG the balance of
$393,093 for these two projects (the $12,503 balance of funds
included in the department's FY 2000-01 budget for the
contract with KPMG, $207,926 for deed backlog reduction,
and $172,664 for the expanded scope/ management plan). The
Budget Analyst notes that the Assessor's Office has incurred
these additional costs of up to $393,093 without first
obtaining prior appropriation approval by the Board of
Supervisors. The current contract with KPMG is limited to
$400,000. The Assessor-Recorder's Office did not have the
authority to finalize an expanded contract with KPMG
without first obtaining prior appropriation approval by the
Board of Supervisors. The Budget Analyst recommends that
the proposed ordinance be amended to provide for retroactive
authorization.
2. According to Ms. Onyemem, KPMG has agreed to complete
the proposed contract with the Assessor-Recorder's Office,
including implementation of the reengineering plan, by June
30, 2001. Ms. Onyemem advises that KPMG has agreed to the
fees and expenses outlined in the budget above at a maximum
cost of $1,126,726. If KPMG exceeds the allotted hours to
complete the workplan, as agreed upon by both parties,
BOARD OF SUPERVISORS
BUDGET ANALYST
21
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
KPMG will not charge the Assessor-Recorder's Office
additional fees for those hours.
3. According to Ms. Onyemem, the Assessors Office negotiated
with the Controller's Office to include the original $400,000
contract with KPMG within a larger City contract with
KPMG in order to begin a reengineering of the department's
business practices as soon as possible. According to Mr.
Hymel of the Controller's Office, these services are included in
the Controller's City-wide audit contract with KPMG. Mr.
Hymel advises that this contract, which was competitively bid
and approved by the Civil Service Commission in May of
1999, allows the City to contract with KPMG for as needed
auditing and accounting services. The contract with KPMG is
a three-year contract with two one-year renewal options.
According to Mr. Hymel, although this three-year contract
between the City and KPMG does not specify a maximum
dollar amount, the Civil Service Commission has approved a
total $7 million for the City-wide audit contract. Mr. Hymel
advises that to date the Controller's Office has expended
approximately $4 million of the $7 million contract, not
including the $387,497 already incurred from the original
$400,000 contract between the Assessor-Recorder's Office and
KPMG. Mr. Hymel advises that the original KPMG contract
for the Assessor-Recorder is limited to $400,000, which was
included in the FY 2000-2001 Assessor-Recorder budget. If
approved by the Board of Supervisors, the proposed
supplemental appropriation would increase this contract with
KPMG by $726,726, for a total in contractual services costs of
$1,126,726.
Description: D. Temporary Salaries
The proposed supplemental appropriation would fund $80,296
in Temporary Salaries to help improve customer service at the
Assessor-Recorder's Office. Ms. Onyemem advises that the
Assessor-Recorder's Office would use the $80,296 to hire four
temporary employees who will be assigned to answering
phone calls from the public and addressing questions and
problems posed by the public. Ms. Onyemem advises that
these temporary employees would allow the Assessor-
Recorder's Office to decrease its backlog of deed processing
and respond to the increase in customer complaints due to
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Budget:
this backlog, as stated in Attachment VI, provided by the
Assessor-Recorder's Office.
The budget for the proposed $80,296 supplemental
appropiation for Temporary Salaries, for the period from
February 1, 2001 through June 30, 2001, is contained in the
table below. This $80,296 supplemental appropriation would
increase the department's budget for Temporary Salaries from
$20,808 to $101,104.
No. ofFTE
Positions
Class
Title
Step 3
Biweekly Salary
(Annual)
Cost
0.78
1368
Special Assistant
(2 positions, for 10 pay periods each)
$2,110
($54,860 each)
$42,428
0.78
8108
Senior Legal Process Clerk
(2 positions, for 10 pay periods each)
$1,596
($41,496 each)
32,093
Subtotal Salaries
$74,521
Employer Taxes
5,775
Total
$80,296
Comment on
Temporary
Salaries:
Ms. Onyemem advises that the Assessor-Recorder's Office has
modeled its proposed improvements to customer service on
improvements implemented in the Office of the Treasurer/Tax
Collector. According to Ms. Onyemem, if the customer service
to be provided by the proposed temporary employees proves to
be successful in addressing customer concerns, the Assessor-
Recorder's Office may request permanent positions in its
budget for FY 2001-02.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Recommendations: Viacom Assessment Appeal
1. Amend tbe proposed ordinance to reduce the
supplemental appropriation request for costs related to
Viacom by $47,590, from $223,887 to $176,297, in
accordance with Comment No. 1 in the section above
addressing the Viacom assessment appeal.
2. Amend the proposed ordinance to provide for retroactive
authorization to appropriate $176,297 for costs previously
incurred without first obtaining prior appropriation
approval from the Board of Supervisors, in accordance with
Comment No. 1 in the section above addressing the Viacom
assessment appeal.
3. Approve the proposed supplemental appropriation of
$176,297, as amended, for costs resulting from the Viacom
assessment appeal process.
ATT/TCI Assessment Appeal
Approve the proposed supplemental appropriation of
$215,000 for costs resulting from the AT&T/TCI assessment
appeal process.
KPMG Contract for Reengineering Project
1. Amend the proposed ordinance to provide for retroactive
authorization to appropriate for costs previously incurred
without first obtaining prior appropriation approval from
the Board of Supervisors. As stated in Comment No. 1 in the
section above addressing the proposed contract with KPMG,
the Assessor-Recorder's Office has been incurring expenses
above the $400,000 originally budgeted for the KPMG
contract for services provided by KPMG since October of
2000, however the department is unsure of the exact
amount since they have not received any bills from KPMG
since October of 2000.
2. Approval of the proposed ordinance, as amended, is a
policy matter for the Board of Supervisors because the
Assessor-Recorder's Office did not have the authority to
incur such costs of up to $393,093 above the $400,000
originally budgeted for the KPMG contract without first
BOARD OF SUPERVISORS
BUDGET ANALYST
Ik
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
obtaining prior appropriation approval from the Board of
Supervisors.
Temporary Salaries
Approve the proposed supplemental appropriation of
$80,296 for Temporary Salaries.
BOARD OF SUPERVISORS
BUDGET ANALYST
Attachment I
Assessment Appeals Board Stipulation
Between City and County of San Francisco and Viacom
for Reduction in Assessed Value of the Possessory Interest
and Business Personal Property
EXECUTIVE SUMMARY
I. Possessory Interest
The Assessor's original $188 million valuation of the 1987 Possessory Interest
was San Francisco's portion of a 10-county appraisal. This appraisal utilized a
methodology that was subsequently invalidated by a number of post-1991 California
court decisions. Throughout the assessment appeal hearing, the Assessor has
acknowledged the need to revalue the Possessory Interest using a permissible method.
The Assessor used an income method appraisal, which resulted in a 1987 value of $106
million. Approximately 75% of the combined Possessory Interest value reductions
contained in the Stipulation directly result from correcting the 10-county appraisal to
conform to the new court cases. The remaining Possessory Interest value reductions
relate to the economic recession beginning in 1991 and the re-regulation of the cable
industry beginning in 1992 which resulted in forced cable rate reductions.
II. Business Personal Property
Three categories of business personal property are the subject of the hearings:
converters/descramblers, the cable distribution system and house drops. With respect to
the first two categories, the parties presented valuations at the hearings based on the
"replacement cost new less depreciation" method. In reaching agreement on stipulated
values, the parties used the same valuation method, adopting inputs as to original cost,
useful lives and depreciation that fell within the range of evidence in the record on those
issues. The Stipulation treats the entire house drop as taxable and adopts a valuation
approach consistent with that used for the other two categories.
III. Conclusions
All valuations contained in the Stipulation are supported by substantial evidence
in the record and the exhibits to the Stipulation.
Source: City Attorney's Office
Lio»AMm£r..^iun>m^1
/
Attachment II
ASSESSOR-RECORDER
VIACOM LITIGATION
Budget
12/12/97-12/19/00
Revised
Budget Supplemental Budget Encumbrance Actual Balance
FY 1997-98
450,000
450.000
282.790
167.210
FY 1998-99
250,000
250,000
375,100
42.110
FY 1999-00
300,000
284,887
584,887
3.440
590.420
33.137
FY 2000-01
100,000
100.000
120,382
12.755
1,100,000
284,887
1,384,887
3,440
1,368,692
Source: Assessor-Recorder's Office
Attachment III
Page 1 of 2
KPMG CONSULTING
BUSINESS PROCESS REENGINEERING PROJECT CHRONOLOGY
■ June 2000 - KPMG Consulting is retained by the City and County to perform a
business process reengineering (BPR) review of the Assessor-Recorder's Office. This
project is to begin July 1, 2000.
■ July 2000 - KPMG Consulting initiates the BPR project on or about July 1st. Shortly
after the project is initiated, KPMG Consulting is asked by the Assessor-Recorder and
the Mayor's Office to refocus their efforts on the deed backlog. At this time all BPR
tasks are suspended and the KPMG Consulting team focuses on coordinating the deed
backlog effort.
■
September 28, 2000 - KPMG Consulting submits a revised scope of work to the
Assessor-Recorder which: ,
. Adds hours and cost associated with the coordination of the deed backlog
. Deletes elements (hours and cost) of the original BPR project to mitigate the
financial impact to the City and County.
October 18, 2000 - Additional items are added to KPMG Consulting's scope by the
Assessor- Recorder's Office and the Mayor's Office. These include the:
. Review of day-to-day management and operations of the Assessor-Recorder's
Office with recommendations for improvement.
. Development of a revised management and organization structure for the
Assessor-Recorder's Office.
. Preparation of a Project Management Plan to address the recommendations of
the Management and Organization and Business Process Reengineering Reports.
October 31, 2000 - KPMG Consulting transitions the monitoring and reporting of the
deed backlog to the Assessor-Recorder's Office and refocuses on the BPR project (per
the September 28th revision).
November 1, 2000 - The Assessor- Recorder's Office requests that KPMG Consulting
provide an estimate of costs to provide support during the implementation of
recommendations (February 1, 2001 - June 30, 2001).
November 20, 2000 - KPMG Consulting submits the "As-Is Process Flows", the first of
the BPR project deliverables, to the Assessor-Recorder's Office Project Steering
Committee.
Source: Assessor-Recorder's Office
kM& Consulting A 1
Attachment III
Page 2 of 2
KPMG CONSULTING
BUSINESS PROCESS REENGINEERTNG PROJECT DELIVERABLES
■ Business Process Reengineering deliverables include:
. "As-Is Process Flows" - November 20, 2000 (Completed)
. "To-Be Process Flows" - January 5, 200 1
. Draft Report of Recommendations - January 1 5, 200 1
. Final Report of Recommendations - January 3 1 , 200 1
■ Coordination of Deed Backlog Effort included the following deliverables (through
October 3 1,2000):
. Facilitation of daily status meetings (Completed)
. Daily production reports (Completed)
. Daily quality assurance/control reports (Completed)
. Daily issue log (Completed)
. Development of deed processing process flows (for use as an interim process
only) (Completed)
. Development of quality assurance/control process flows (Completed)
. Monthly status updates to Assessor-Recorder, Tax Collector, Controller, and
Mayor's Office (Completed).
■ Management and Organization Project deliverables include:
. Draft Report of Recommendations - January 1 5, 200 1
. Draft Project Management Plan- January 15, 2001
_ Final Report of Recommendations- January 31, 2001
. Final Proj ect Management Plan - January 3 1 , 200 1
■ Implementation Support deliverables will be determined when project scope and
approach is finalized on or about February 1, 2001.
WJ&
Consulting
Attachment IV
Page 1 of 2
Source: Assessor-Recorder's Office
December 19, 2000
TO: Budget Analyst
FROM: Bose Onyemem
RE: Request for Supplemental -KPMG
Reengineering Project-Attachment
1. Describe the project both development and implementation
Development — KPMG will establish a comprehensive public service unit -:
• identify inefficient processes
• develop solutions for improvements
• document "as is " processes
• research best practices
• identify and train staff
• review and refine job classifications,
• identify and recommend facilities enhancement,
• establish performance measures and
• monitor results.
Implementation-KPMG will implement process improvement plan
• conduct a training needs assessment
• provide necessary training
• implement changes and monitor performance
• transfer knowledge to selected Assessor-Recorder resources
• develop recommendations for additional staff development
a) How much was originally budgeted for the entire project?
• Original estimate by KPMG for reengineering was for 2800 hours at $477,895,
(399,820-professional fees and $78,075 other expenses), however the
department only has a funding allocation of $400,000 in the budget.
What is the new total project costs?
Hours Professional Other
Fees
Expenses
Total
Reengineering/Deed Backlog
3,368
$519,487
$88,439
$607,926
Expanded scope
760
150,164
22,500
172,664
Implementation -estimate
1.800
300.988
45.148
346.136
5,928
970,639
156.087
1.126.726
2 Why do you need the funds you are requesting, in addition to the money that was
already 2000-01?
• Rengineering/Deed Backlog $607,926 Will be completed by 1/31/2001
• Expanded scope 172.664
• Total Expenses 780,590
• Available per budget 400,000
-ME00014.doc
?n
Attachment IV
Page 2 of 2
• Current deficit 380,590
• Estimate-Implementation 346.136
• Amount required $726,726
3. State why you need KPMG to implement the program, rather than the Assessor's
office doing it themselves. -
• To provide a more objective analysis of best practices and implement successfully, it's more
prudent to bring in an independent consultant with diverse skills in government
reengineering process
4. State how you selected KPMG. ..why are you using an existing contract between
The Controller and KPMG, rather than undergoing your own RFP/Contract process.
• Since the Controller already has a City certified contract with KPMG coupled with the time
frame constraint to start the reengineering process in July 2000 and resolve the assessment
roll backlogs, it was more expedient and prudent to use the controller certified contract
rather than wait through the 4 months approval process for consulting service.
6. Have you expended any Assessor's Office staff time or other department funds
for this project. If so, how much have you spent and how much was budgeted in FY
2000-01 for this use (include details in the budget requested below).
•
• No
Please provide a detailed budget of the entire reengineering project, which includes:
a) Details for how you spent the approximate $400,000 already budgeted for the
Reengineering Project
Professional
Other
Month
Hrs
Fees
Expenses
Total
• July
521
$79,382
7,180
86,562
• August
520
80,440
9,364
89,804
• September
472
74,090
10,313
84.4031
• Octobe r
673
107.694
19.034
126.728
.
2.177
341.606
45.891*
387.497
"Other expenses incl
ude
■ Daily per diem rates -
I
Lodging-$158.00
I
Food
46.00
Average dail\
r parkinc
j fees
14.00
Mileage is billed at .325. mile
b) KPMG: Hourly fees charged, around and kind of staffing to be provided
• Sub-contractor $121.28/hr.
• Senior Consultants 148.84/hr.
• Project Manager 165.38/hr.
• Managing Director 281.14/hr.
c) Details for any Assessor staff time or other costs (if staff time has been used,
include classifications and salaries)
• None
-ME00014.doc
, x Attachment V
■ ■■■ Pase 1 of 2
Consulting
400 Capitol Mail, Suite 800 Telephone 916 554-1114 Fax 916 551 3030
Sacramento, CA 95814
November 1, 2000
Ms. Bose Oneyeman
Assessor-Recorder's Office
City and County of San Francisco
City Hall
1 Dr. Carlton B. Goodlett Place
San Francisco, CA 94102-4694
Dear Ms. Oneyeman:
KPMG Consulting is pleased to present you with our estimate of the professional fees and
expenses associated with the implementation of the Business Process Reengineering (BPR)
study.
Background
KPMG Consulting is currently engaged in conducting a BPR study for the City and County of
San Francisco's Assessor- Recorder's Office. Per our revised scope of work dated September 28,
2000, KPMG Consulting anticipates completing the BPR study, including the creation of a
customer service unit, in January 2001. We have been asked to provide the City and County of
San Francisco with an estimate of the professional fees and expenses associated with
implementing the recommendations made in the BPR study.
Proposed Implementation Schedule and Costs
Based on our prior experience with similar implementation engagements, we estimate it will take
approximately 1,800 hours of staff time to assist the Assessor-Recorder's Office with the
implementation of the BPR. Given our plan to complete the BPR study in January 2001, we
anticipate implementation beginning on February 1, 2001 and concluding on June 30, 2001.
Based upon current contracted rates with the City, we estimate we can assist the Assessor-
Recorder's Office with the implementation of the BPR study for a total of $346,136. This
includes $300,988 in professional fees and $45,148 in expenses. Exhibit 1 on the following
page shows the estimated staffing plan, by month, as well as the City approved rates effective
through 06/30/01.
KPMG Consuttng. UC- KPMG C«m«r>g. LLC is ) iubvdxy d
J55SP
Consulting
Attachment V
Page 2 of 2
Ms. Bose Oneycman
City and County of San Francisco
November 1. 2000
Exhibit 1: Hours by Month
Month
Managing
Direcior
(O'Neill/
Pierce)
Manager
(Rohxbach)
Senior
Consultant
(Chatters)
Analyst
(Anderson)
Total
February
40
80
80
200
400
March
40
80
80
200
400
April
40
80
80
150
350
May
40
80
80
150
350
June
40
80
80
100
300
Total Hours
200
400
400
800
1,800
Rate per Hour
$281.14
$165.38
$148.84
$148.84
Total Professional Fees
$56,228
$66,152
$54,536
$119,072
S300,988
KPMG Consulting will provide the Assessor-Recorder's Office with a detailed implementation
plan in December 2000. Should you have any questions or concerns, please do not hesitate to
contact me at 415-554-5657.
Very truly yours,
KPMG Consulting LLC
V.&A-
Micaela V. Ochoa
Manager
-"■• Attachment VI
Source: Assessor-Recorder's Office
December 19, 2000
TO: Budget Analyst
FROM: Bose Onyemem
RE: Request for Supplemental -Temporary Salaries
Annual
Salary
Step 3 Cost
1 . Special Assistant IX, Class 1 368
(.39 FTE, 2 positions at $2,110 B/W for 1 0.833 pay periods) $54,860 $42,428
Senior Legal Process Clerk Class 8108
(.39 FTE, 2 positions at $1,596 B/W for 10.833 pay periods) 41,496 32,093
Subtotal Salaries $74,521
Employer Taxes 5,775
Total $80,296
2. What the employees will be doing (describe duties for each classification)
8108-Senior Legal Process Clerks will respond to customer's complaints in a courteous, prompt and
efficient manner within one working day. Research computer information for Assessor-Recorder parcels
and deeds and provide prompt and accurate information to the public.
1368-Special Assistant IX- Under general administrative direction, coordinate prompt and accurate
response to taxpayers. Ability to work under pressure and deal effectively, courteously and efficiently
with the public. Ability to work and make independent decisions Extensive knowledge of Assessor-
Recorder operations is required. Ability to speak English, Spanish /Chinese.
3. Why do you need them?.
There has been an increase in the number of complaints by the public over the use of voice mail to
address questions. In order to promote good public relations and earn overall positive response of at
least 80 percent from taxpayers, it is important that the Office of the Assessor-Recorder maintains a
customer section with staff ready to address taxpayers/public concerns efficiently and promptly
The Customer service section will be modeled after the Tax Collector's Customer Service section
4. Why did you not request them in your budget request for FY 2000-01
During the budget preparation phase of FY 2000-01 , the department was already negotiating with
KPMG to establish an effective office operation and improved customer service . The department
decided to wait for the KPMG recommendation before implementation.
5. How much you have budgeted in FY 2000-01 for Temporary
$20,808 budgeted to fund temporary employees needed to clear the assessment rolls backlog.
How much have you spent on Temporary Salaries to date.
Nothing
6. Explain why you will no longer need the employees after the end of this fiscal year.
The positions are funded for 5 months in the current fiscal year. The positions may be included in FY
2001-2002 budget request pending the outcome of KPMG reengineering recommendation.
-ME00014.doc
Memo to the Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Items 5 and 6 - Files 00-2184 and 00-2183
Department:
Items:
Amount:
Source of Funds:
Description:
Department of Child Support Services
File 00-2184: Ordinance appropriating $839,562 to
implement a new State-required Customer Service Unit,
including the creation of two new investigator positions
and related operating costs at the Department of Child
Support Services.
File 00-2183: Ordinance amending the Annual Salary-
Ordinance for Fiscal Year 2000-01 (Ordinance No. 181-00)
reflecting the creation of two new positions in the
Department of Child Support Services.
$839,562
The entire $839,562 supplemental appropriation would be
funded by State and Federal monies, administered by the
State Department of Child Support Services.
California Family Code Section 17304, signed into law in
1999, required all counties in California to create a
separate Department of Child Support Services, which
would be independent from other local departments and
report directly to the new State Department of Child
Support Services (the "State"). In San Francisco, the new
City Department of Child Support Services began
functioning independently on July 1, 2000. Previously,
child support services had been provided by the Family
Support Bureau, a division of the District Attorney's
Office. According to Mr. Merlin Zimmerly of the
Department of Child Support Services, the department's
budget is funded entirely by State and Federal funding, a
requirement of the State law mandating separation of the
Family Support Bureau from the District Attorney's
Office.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to the Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
File 00-2184: The proposed ordinance would appropriate
$839,562 to support both operating costs and the
implementation of a State-required new Customer Service
Unit.
The Department of Child Support Services would use the
proposed $839,562 supplemental appropriation as follows:
Customer Service Unit ($335.316)
According to Mr. Zimmerly, the State law mandating an
independent department for Child Support Services also
required that each such department create a Customer
Service Unit by January 1, 2001. Mr. Zimmerly advises
that the Customer Service Unit will conduct outreach to
inform the public of services provided by the department, •
work to make child support programs more accessible,
address citizen complaints, and work to make the court
process more understandable and comfortable for
participants in child support programs. Attachment I,
provided by the Department of Child Support Services,
contains the $335,316 spending plan submitted to and
approved by the State.
Attachment II, provided by the Department of Child
Support Services, contains an explanation of the staffing
at the new Customer Support Unit, including a
justification for the two new investigator positions. In
addition to the requested two new investigator positions
described below, the staff of the new Customer Service
Unit will also consist of three existing ombudsman
positions, for a total of five positions. According to Mr.
Zimmerly, the one existing investigator position of the
Department of Child Support Services is currently
performing customer services functions in order to meet
the January 1, 2001 State mandate.
Work Order to Sheriffs Department ($144.945)
The Department of Child Support Services requires that
two security guards be stationed at the department's front
door to operate a metal detector and to remove any
weapons brought into the office by clients. In addition, as
part of the department's investigations of absent parents,
the department must have access to criminal justice
records stored in the California Law Enforcement
BOARD OF SUPERVISORS
BUDGET ANALYST
IS
Memo to the Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Telecommunications System (CLETS), which can only be
operated by peace officers according to State law.
Therefore, the proposed supplemental appropriation
would fund a $144,945 work order to the Sheriffs
Department to obtain the services of two new 8304
Deputy Sheriff positions. The two new Deputy Sheriffs
would alternate between providing security at the
department's front door and using the CLETS terminal to
access criminal justice records.
Ms. Zimmerly advises that the department currently has
two permanent 8204 Institutional Police Officer positions
providing security at the department, but that such
Institutional Police Officers are not authorized by the
State to access criminal justice records through the •
CLETS system. Mr. Zimmerly advises that the
department plans to request a reclassification of' the
existing two 8204 Institutional Police Officer positions to
Investigator positions.1
Correct a Technical Error which Resulted in
Underbudgeting ($98,856)
Mr. Zimmerly advises that the State approved $118,000
for Other Current Expenses, which the Department of
Child Support Services included in its FY 2000-01 budget
request. During budget preparation, this amount was
inadvertently reduced by $98,856 to $19,144. The
proposed supplemental appropriation of $98,856 for Other
Current Expenses would correct this underbudgeting
error and restore the originally budgeted amount of
$118,000. As stated previously, this $118,000 for Other
Current Expenses has already been approved by the State
for Fiscal Year 2000-01.
1 According to Mr. Zimmerly, the Department of Child Support Services' FY 1999-2000 budget
included two entry-level exempt investigator positions to both serve as security guards and to
operate the CLETS computer terminals. However, Mr. Zimmerly reports that the State law
requiring an independent Department of Child Support Services removed the department's
authority to directly employ Peace Officers. As a result, in the FY 2000-01 budget for the
Department of Child Support Services, the two exempt Peace Officer positions were reclassified as
8204 Institutional Police Officer positions. According to Mr. Zimmerly, although the State allows
the Department of Child Support Services to hire such 8204 Institutional Peace Officers, the State
Penal Code does not authorize these positions to operate CLETS terminals, a service needed by the
department to access criminal justice records.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to the Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
CASES Consortium ($254,445)
According to Mr. Zimmerly, the State selected the City's
Computer Assisted Support Enforcement System
(CASES), which tracks non-custodial parents required to
pay child support, as the database system to be used by
33 other counties in California. Mr. Zimmerly advises
that the State has requested that the Department of
Child Support Services act as the fiscal agent for the
CASES Consortium to contract with a private computer
consulting firm to install CASES in the 33 CASES
Consortium counties. Mr. Zimmerly reports that this
consulting firm, named Informatix, Inc. was selected
through a competitive bidding process for a two-year
contract with three one-year extensions. The proposed
$254,445 for the CASES system would fund $163,020 for -
additional services to modify the CASES system to
produce a new financial report required by the State
(hourly rate charged by Informatix of $110 for 1,482
hours) and $82,280 for assistance to be provided to
Monterey and Merced Counties ($110 hourly rate times
748 hours).
The supplemental appropriation would also fund $9,145
in services already provided to Glenn County directly by
the Department of Child Support Services ($4,875 for
Department of Child Support Services staff to travel to
Glenn County and $4,270 for temporary rental of
computers).
City Intranet Services
In becoming an independent department, the Department
of Child Support Services must become connected to the
City's Intranet/Email system. According to Mr. Zimmerly,
the State has provided a separate allocation to fund the
costs of this connection, which is included in the proposed
supplemental appropriation.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to the Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
File 00-2183: The proposed ordinance would amend the
Annual Salary Ordinance for Fiscal Year 2000-01 to
create the following two new permanent positions in the
Department of Child Support Services:
No. of
FTE
Positions
Class
Title
Stepl
Biweekly Salary
(Annual)
Step 5
Biweekly-Salary
(Annual)
1.0
8160
Assistant Chief Family
Support Investigator
$2,221
($57,968)
$2,779
($72,532)
1.0
8158
Family Support Investigator II
$1,710
($44,631)
$2,130
($55,593)
According to Mr. Zimmerly, the proposed two new
investigator positions would help to staff the new
Customer Service Unit discussed above, at a total
annualized cost of $160,256. The annualized cost of the
Assistant Chief Family Support Investigator at Step 5
would be $90,765, including $72,532 in Salary and
$18,233 in Mandatory Fringe Benefits. The annualized
cost of the Family Support Investigator II at Step 5 would
be $69,491, including $55,593 in Salary and $13,898 in
Mandatory Fringe Benefits.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to the Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Budget:
A budget for the proposed supplemental appropriation of
$839,562 is shown in the table below:
Budget
Customer Services Unit (See Attachment I)
One-time Set-up Costs
$80,000
Operating Costs
148,546
Personnel
8160 Asst. Chief Family Support Investigator (0.67 FTE, 8 months)
48,354
8158 Family Support Investigator II (0.67 FTE, 8 months)
37,062
Fringe Benefits (25 percent)
21.354
Subtotal Personnel
$106,770
Subtotal Customer Services Unit
$335,316
Work Order to Sheriffs Department
144,945
Inadvertent Underbudgeting
98,856
City Intranet Connection
6,000
CASES Consortium
Fiscal Agent for Upgrade to Meet New Reporting Requirements
163,020
Assistance to Merced and Monterey Counties
82,280
Assistance to Glenn County
9.145
Subtotal CASES Consortium
$254,445
Total Supplemental Appropriation
$839,562
Comments:
1. According to Mr. Zimmerly, the Department of Child
Support Services plans to fill the proposed two new
positions (Assistant Chief Family Support Investigator
and Family Support Investigator II) for the five-month
period from February 1, 2001 through June 30,2001.
However, the spending plan included in Attachment I,
provided by the Department of Child Support Services,
budgets the two new positions for eight months
(November through June) in FY 2000-01, rather than the
actual five months that the department will employ the
new employees (February through June) in FY 2001.
Therefore, the proposed supplemental appropriation of
$106,770 for new personnel should be reduced by $40,039
to $66,731 to reflect the actual number of months the new
employees will be employed in FY 2000-01. This proposed
reduction includes a reduction of: (a) $32,031 in Salaries,
from $85,416 to $53,385, and (b) $8,008 in Mandatory
Fringe Benefits, from $21,354 to $13,346. A summary of
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to the Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
the recommend reductions is contained in the following
table:
Title
Annual Salary
Budgeted
Salary
(8 months)
Corrected
Budgeted
Salary
(5 months)
Proposed
Reduction
8160 Assistant Chief Family
Support Investigator
$72,532
$48,354
$30,221
$18,133
8158 Family Support Investigator II
55,593
37,062
23,164
13,898
Subtotal Salaries
$128,124
$85,416
$53,385
$32,031
Fringe Benefits (25 percent)
21,354
13,346
8,008
Total
$106,770
$66,731
$40,039
2. Ms. Jean Mariani of the Sheriffs Department advises
that the Sheriffs Department will train two new Deputy
Sheriffs to fill the two positions needed at the Department
of Child Support Services. Therefore, the proposed
$144,945 work order to the Sheriffs Department includes
one-time costs of $61,000 for acquiring two new Deputy
Sheriffs, including $54,000 for training and $7,000 for the
cost of new uniforms and radios. As stated in Attachment
III, provided by the Sheriffs Department, the two new
Deputy Sheriffs will not complete training until July of
2001. For the rest of this fiscal year, the Sheriffs
Department will staff the two positions at the
Department of Child Support Services with two existing
Deputy Sheriff positions, beginning in March of 2001 for
the four-month period between March 1, 2001 and June
30, 2001. However, the proposed work order from the
Department of Child Support Services to the Sheriffs
Department budgets the two positions for six months
each. Therefore, the proposed $144,945 for the work order
to the Sheriff Department should be reduced by $18,686
to $126,259 to reflect the actual number of months of the
work order. The reduced amount of $126,259 includes the
total $120,968 shown in the budget for the four-month
period beginning March 1, 2001, included in Attachment
IV provided by the Sheriffs Department, which includes
overtime costs of $2,645. The reduced amount of $126,259
also includes an additional $5,291 in possible over time
costs, as discussed in Attachment III, provided by the
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to the Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Sheriffs Department.2 Mr. Zimmerly advises that the
annualized cost of the work order in FY 2001-02, less the
one-time costs, would be $168,536.
3. As stated previously, the Department of Child Support
Services currently has two filled 8204 Institutional Police
Officers providing security at the department's front door,
which will be replaced by the two Deputy Sheriffs funded
by the subject $144,945 work order from the Department
of Child Support to the Sheriffs Department. According to
the State Penal Code, the two Institutional Peace Officer
positions are not permitted to access the California Law
Enforcement Telecommunications System (CLETS).
Therefore, according to Mr. Zimmerly, the department
plans to request a reclassification of the existing two 8204 ■
Institutional Police Officer positions to two Investigator
positions. The Budget Analyst notes that: (a) once the two
Deputy Sheriffs replace the two existing 8204
Institutional Police Officer positions the department will
no longer need the two existing positions, and (b) the
department has not sufficiently demonstrated its need for
reclassifying the two existing 8204 Institutional Police
Officer positions into two Investigator positions. Since the
two existing 8204 Institutional Police Officer positions are
currently filled, the Budget Analyst recommends that the
proposed ordinance be amended to require the
Department of Child Support Services to eliminate the
two 8204 Institutional Police Officer positions as soon as
each position becomes vacant.
4. As stated previously, the proposed supplemental
appropriation includes $9,145 for obligations incurred for
assistance with the CASES system already provided to
Glenn County. Therefore, the proposed ordinance should
be amended to provide for retroactive authorization.
According to Mr. Zimmerly, the Department of Child
Support Services has not yet received any of the subject
funds from the State, since the State reimburses the
2 The Budget Analyst notes that the since the Department of Child Support Services is entirely
funded through the State, the State should fund any overtime costs the Sheriffs Department may
incur in order to station two Deputy Sheriffs at the Department of Child Support Services. Should
the Sheriffs Department not need to incur additional overtime costs of $5,291, the funds would
remain with the State since the State reimburses the Department of Child Support Services as
expenses are claimed on a quarterly basis.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to the Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Department of Child Support Services as expenses are
claimed on a quarterly basis. Mr. Zimmerly advises that
the department has not incurred any obligations for any
of the other costs under this $839,562 supplemental
appropriation request.
Recommendations: 1. Reduce Salaries and Mandatory Fringe Benefits
included in the proposed supplemental appropriation (File
00-2184) by $40,039, from $85,416 to $53,385, to reflect
the actual number of months the proposed two new
employees will be employed in FY 2000-01, in accordance
with Comment No. 1. This reduction of $40,039 includes
$32,031 for Permanent Salaries and $8,008 for Mandatory
Fringe Benefits.
2. Reduce the proposed work order to the Sheriffs
Department (File 00-2184) by $18,686, from $144,945 to
$126,259, to reflect the actual number of months the work
order will be in place, in accordance with Comment No. 2
above.
3. Amend the proposed ordinance (File 00-2184) to reduce
the funding sources for the subject appropriation by
$58,725 to correspond with the total $58,725 in reductions
recommended above ($40,039 budgeted for the two new
investigator positions and $18,686 budgeted for the work
order to the Sheriffs Department).
4. Amend the proposed ordinance (File 00-2184) to require
the Department of Child Support Services to eliminate
the two existing 8204 Institutional Police Officer positions
as each position becomes vacant, in accordance with
Comment No. 3 above.
5. Amend the proposed ordinance (File 00-2184) to
provide for retroactive authorization for $9,145 in services
already provided to Glenn County related to the CASES
system, in accordance with Comment No. 4 above.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to the Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
6. Approve the proposed supplemental appropriation (File
00-2184), as amended, and approve the proposed
amendment to the Annual Salary Ordinance (File 00-
2183).
BOARD OF SUPERVISORS
BUDGET ANALYST
Department of Child Support Services
Customer Service Unit
Fiscal Year 2000-2001 (8 mos from 110100 thru 063001)
n.i_i_d.cument i
PERSONNEL
Position
1 - 8160 Assistant Chief Family Support Investigator (Step 5)
3-8159 Family Support Investigator III
1 - 8158 Family Support Investigator II (Step 5}
Subtotal Salaries
Mandatory Fringe Benefits
Total Personnel
OPERATING COSTS
Travel
Training
Professional Services
Contracts
Services
Printing
Advertising
Fuel/Auto Service
Materials and Supplies
Subscriptions
Telephone Usage
Miscellaneous
Total Operating Costs
ONE TIME COSTS
Complaint Resolution Tracking Data Base Development (Computer Consulting)
Voice Recognition Unit (VRU) Hardware
Full Size Sedan
Computer Equipment (5-PC's and 1 -Printer)
Total One Time Costs
48,354
37,062
00100
85,416
01300
21,354
106,770
02300
4,394
02300
16,500
02700
2,200
02700
5,000
02700
43,059
03500
2,750
03500
2,750
04000
4,400
04000
2,200
03500
200
081 ET
61.392
03500
3,701
148,546
02700
35,000
06000
5,500
06000
21,000
04000
18,500
80,000
Total State Allocation Spending Plan
* Three Ombudsperson positions budgeted in regular Child Support
Services budget must be transferred per State requirements.
335.316
Source: Department of Child Support Services
kk
Attachment II
WILLIE L. BROWN, JR. /^5SSK^\ MILTON \i. u\ AMS
MAYOR feloffiSSSF Isl ACTING DIRECTOR
CITY AND COUNTY OF
SAN FRANCISCO
DEPARTMENT OF CHILD SUPPORT SERVICES
617 Mission Street, San Francisco, CA 94105-3503 Tel. (415) 356-2700
January 10, 2001
Harvey Rose, Budget Analyst
San Francisco Board of Supervisors
CUSTOMER SERVICE UNIT STAFFING
The customer service function is a requirement of the state's Ombudsman Program. The
Ombudsman program is established for the purpose of assisting customers in resolving issues
related to their child support cases as well as other service-related functions.
The Department of Child Support Services Director shall appoint staff, qualified by training and
experience to perform the duties of the office. In San Francisco, the need for several
Ombudsman positions was identified based on caseload size. Because these three 8159, Family
Support Investigator 111 positions were previously anticipated, they were budgeted for in the
fiscal year 2000-2001. Upon release of the customer service initiative guidelines, the state made
it clear that this unit was to be supervised by an individual that would report to the Director. This
person was to have a strong background and broad experience in the child support program as
well as an understanding of the principles of customer satisfaction and quality control. In
addition, to be effective and gain the trust of the public, the customer service unit was designed
to be autonomous and free from the influence of day-to-day operations. Thus, the need for a new
81 60, Assistant Chief Investigator position to oversee the program was required to carry out the
aforementioned, as well as provide quality control activities and report to the Director.
The Ombudsman work directly with the public, with much of the work being field related. The
customer service unit, however, will perform many other service-related duties such as
maintenance of the noncustodial parent (NCP Program) employment and training services. It is
critical to have a caseload management person assigned to the unit to give exclusive care to the
customer service unit child support cases. Thus the request for a new 8158, Family Support
Investigator II caseworker position.
4S
City and County of San Francisco
OFFICE OF THE SHERIFF
Attachment III
«A Michael Hennessey
2\ SHERIFF
415 - 554 - 7225
January 10, 2001
Ref: BPM 2000-049
TO: Emilie Neumann
FROM: Jean Mariani
SUBJECT: Files 00-2184 and 00-2183
Y
You requested additional information regarding two Sheriff's Deputies
Included In the Department of Child Support Services supplemental
appropriation request.
Once this funding is approved, we would create two additional deputy
requisitions. A new academy class begins February 5. Deputies
enrolled in this academy will be available for service in six months. In
the interim, the department will assign one deputy on regular salary
and one deputy on overtime to work at the Department of Child
Support Services. The additional overtime cost for the remainder of
the fiscal year would be $2,645. These deputies are under the Field
and Support Services Division, which has more flexibility in
assignments than the other major service areas of the department,
i.e., the jails and courts.
However, in the worst case scenario, should the department need to
pay overtime to both assigned deputies, Jthe incremental overtime cost
for the four-month period (March 1 through June 30, 2001) would be
approximately $5,291, or $1,323 per month, including related
mandatory fringe benefits.
Based on a March 1, 2001 start date, the estimated cost of the work-
order is $120,968.
ROOM 4M.OTY HALL
1 DR. CARLTON B. GOODLETT PLACE
SAN FRANCISCO, CA 94102
FAX 415- 554 -7050
TOTAL P. 02
LC
Attachment IV
8304 Deputy
Child Support Services
Base Salary (Top Step)
8304- Deputy
Count Amount Percentage
0 52,094
Pay Periods
0.0
3-1 through e-30-2001
8304 Deputy
0 $2,146
8.7
Total Base Salaries
Night Differential (1700-0700)
Overtime
Holiday Pay (11 days)
POST Pay
Annual Uniform Allowance
Total Pay
Retirement (City Share)
Retirement Pick-up
Health Service
Health Service Pick-up
Dental Insurance
2000 Benefit Increase
Medicare
Unemployment Insurance
Total Fringe Benefits
Subtotal Compensation
0.00
hrs/week
8.00%
80.00
hrs/week
1 50.00%
0
$318.03
6.00%
0
$750.00
7.099%
9.00%
0
S83.46
0
$103.86
0
$39.42
10%
$0.00
1.45%
0.170%
55.337
55,337
802
94
896
56.233
Initial Costs (uniform/radio) 0 $3,500.00
Total
Overhead @ 10% of Salaries (&raiehir -tfrre.)
TOTAL REQUESTED
bb.132 |
3.735
59.968
Backfill for Academy
Uniform/Radio
Total 2000-01
54,000
7,000
120,968
Source: Sheriff's Department
TOTftL P. 02
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Item 7 - File 00-1251
Department:
Item:
Amount:
Source of Funds:
Department of Public Health (DPH)
Hearing to consider the release of $1,233,854 in reserved
funds for the San Francisco General Hospital Department
of Psychiatry Acute Inpatient Service.
$1,233,854
During the Board of Supervisors FY 2000-01 budget
hearings, $1,233,854 of the funding for the San Francisco
General Hospital (SFGH) Department of Psychiatry was
reserved in two amounts:
Description:
Budget:
Comments:
• $833,854 for permanent salaries.
• $400,000 for contractual services.
According to Ms. Monique Zmuda of DPH, the Board of
Supervisors appropriated $1,233,854 for the continuation
of 24 acute inpatient psychiatric beds at SFGH. Ms.
Zmuda states that these funds were reserved in order to
allow the Board of Supervisors to review DPH's
performance in (a) reducing the length of inpatient stays
for psychiatric patients who are no longer acute, and (b)
achieving its revenue goals.
The subject release of reserves would fund continuation of
SFGH's acute inpatient psychiatric services at then-
current level by funding:
• Portions of ongoing civil service staff members'
salaries ($833,854).
• The ongoing University of California, San Francisco
contract for psychiatric physician services ($400,000).
1. According to Ms. Zmuda, as part of its FY 2000-01
budget development, DPH proposed to eliminate 24 of the
92 acute inpatient psychiatric beds at SFGH. As this
proposal was not accepted by either the Board of
Supervisors or the Mayor, DPH formulated the following
alternative strategy to fund the 24 beds.
BOARD OF SUPERVISORS
BUDGET ANALYST
48
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
SFGH psychiatric physicians asserted they could generate
$1,800,000 in Medi-Cal, Medicare, and private health
insurance revenue per year from the 24 SFGH beds. This
assumed that the psychiatric patients occupying those
beds were sufficiently acute to be eligible for Medi-Cal,
Medicare, and private health insurance coverage.
However, because the total cost of operating those beds
was estimated to be $3,000,000, DPH agreed to provide
the balance of $1,200,000 using (a) $800,000 of mental
health contract funding previously used to place acute
psychiatric patients with Medicare in other hospitals, and
(b) $400,000 of General Fund support. Under the DPH
proposal, if the SFGH psychiatric physicians failed to
meet their revenue target because they were unable to
reduce the length of psychiatric inpatient stays
(particularly if they failed to reduce the number of
decertified days for non-acute, non-revenue generating
stays), then DPH would have the option to close some or
all of the 24 beds.
DPH has supported this SFGH acute inpatient
psychiatric services initiative by investing more resources
into alternate levels of psychiatric care, in particular by
creating more placement opportunities which are
appropriate for patients diverted or discharged from acute
care. Attachment I, provided by Ms. Zmuda, shows the
325 new beds which are being funded by DPH in FY 2000-
01 at a total cost of $4,839,775 for the placement of non-
acute psychiatric patients.
2. Ms. Zmuda states that, based on the plan to continue
the 24 SFGH beds described in Comment No. 1 above,
SFGH has maintained a full census of 92 acute inpatient
psychiatric services thus far during FY 2000-01 As of
October of 2000, the SFGH Department of Psychiatry has
exceeded its performance objectives and financial goals.
Attachment II, provided by DPH, shows that in October of
2000 the Department of Psychiatry had (a) reduced its
year-to-date average length of stay (ALOS) to
approximately 8.7 percent less than the goal, and (b) (a)
exceeded its year-to-date revenue goal by approximately 3
percent.
BOARD OF SUPERVISORS
BUDGET ANALYST
49
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
3. Since the SFGH Department of Psychiatry has
exceeded its performance objectives and financial goals,
the Budget Analyst recommends release of the $1,233,854
in reserved funds for SFGH's acute inpatient psychiatric
services.
Recommendation: Approve the proposed release of reserves.
BOARD OF SUPERVISORS
BUDGET ANALYST
50
Attachment I
New Program in FY 00-01
Number of
New
Beds/Slots
Amount
Increase in number of Organic Disorder Patched Skilled Nursing Beds
4
188,342
New LHH Med/ Psych SNF ward (funded through existing resources)
30
Increase to Napa Intensive Skilled Nursing Psych Beds
4
456,000
Increased days at high level skilled nursing at Crestwood
1
40,000
New Supportive Housing Program -Le Naine
98
1,048,000
Respite hotel program for psych inpatient and PES referrals
50
900,000
Respite beds at Windsor Supportive Hotel program
16
120.000
New Residential Care Beds
20
324.766
New Shelter Support Mental Health Program
35
220,000
New residential diversion mental health program
12
1.052.000
New Homeless supportive housing through AB2034 Program
55
490.667
325
4,839,775
Source: Department of Public Health
51
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52
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Item 8 - File 00-2187
Department:
Item:
Contract Term:
Description:
Department of Public Health (DPH)
Resolution authorizing the Director of Public Health and
the Purchaser to execute a contract between the City and
County of San Francisco and Health Advocates, LLP to
provide uncompensated care recovery services.
March 1, 2001 through December 31, 2002 (approximately
22 months).
Uncompensated care recovery services include the
assistance to complete Supplemental Security Income
(SSI) and Medi-Cal eligibility applications on behalf of -
DPH patients, and representation and legal assistance for
patients in SSI fair hearings and appeals, for the purpose
of collecting unpaid inpatient hospital bills for DPH
services that are provided to indigent patients. The
proposed resolution would authorize DPH to enter into a
contract with Health Advocates, LLP (HA), a private
contractor, to provide an uncompensated care recovery
program.
The DPH issued a Request for Proposals (RFP) in
September of 2000, and received the following two bids in
response to its RFP: (1) Health Advocates, LLP for
$1,180,000 each contract year and, (2) Paralign for
$1,090,000 each contract year. Attachment I, provided by
Ms. Monique Zmuda from the DPH, indicates that the bid
amounts were based on estimated annual revenue of
$6,000,000, which has since been reduced to $5,800,000.
Ms. Zmuda further advises in Attachment I that HA
reduced its bid by $90,000 to $1,090,000 each contract
year, the same amount bid by Paralign, after negotiations
with the DPH. According to Ms. Zmuda, HA was selected
based on the DPH's evaluation of the established criteria,
which awards points based on recent relevant experience,
the scope of work to be performed, the quality of past
projects and cost. Ms. Zmuda states that the DPH also
required the bidder to provide these services by multi-
lingual and multi-cultural staff. Ms. Zmuda further
states that the DPH also built in additional services into
the scope of work, including following up on treatment
BOARD OF SUPERVISORS
BUDGET ANALYST
53
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
authorization requests, and incurring the cost of re-billing
for services provided, once the clients have been made
eligible for Medi-Cal.
According to Ms. Zmuda, the DPH has contracted out
uncompensated care recovery services since 1988 to help
supplement in-house efforts on uncompensated care
recovery services. Ms. Zmuda advises that San Francisco
General Hospital (SFGH) has an internal staff of ten
Hospital Eligibility Workers to assist SFGH patients in
identifying financial resources to pay for inpatient
hospitalization for which no source of funding is currently
available. Eligibility determination, which is provided by
DPH personnel, and authorized by the City's Department
of Human Services, typically includes assistance in ■
applying for Medi-Cal or SSI, and making appropriate
third-party claims. The contractor will handle those cases
which the internal DPH eligibility workers have deemed
"unreimburseable," usually involving former inpatients
who have been discharged form SFGH. These
uncompensated care services include identifying financial
resources to pay for the care provided, field work on
behalf of indigent patients, such as visits to homeless
shelters; assistance in obtaining further medical
treatments or evaluations, as necessary; efforts to locate
former inpatients whose addresses are not known, and
patient advocacy and representation in appealing denials
of benefits to administrative agencies.
Based on a prior year actual recovery from contracting
this service, Ms. Zmuda advises that the DPH was paid
approximately $5,800,000 a year, or approximately
$483,333 a month from making indigent patients eligible
for third-party payment. The DPH anticipates the same
level of annual reimbursement to be made under the
proposed contract period.
The proposed subject contract would only pay the
contractor a percentage of the revenues actually collected,
on behalf of the City, according to the following schedule:
BOARD OF SUPERVISORS
BUDGET ANALYST
54
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Cumulative Revenues Generated
Each Contract Year
Comments:
$2 million
$3 million
to$l,999.999 NET
to$2,999,999 NET
and above NET
Contingency Fees
Paid to the Contractor
20 percent
18 percent
16 percent
Recommendation:
"NET' is used to describe the actual cash received by
SFGH as opposed to any unique program determinations
of allowable amounts and the deduction of contractual
allowances. In accordance with the contract provisions,
HA would be paid a varying fee by the DPH based on the
percentage of the revenues collected by the contractor.
1. As indicated above, the proposed contract would
extend for the 22-month period from March 1, 2001
through December 31, 2002. According to Ms. Zmuda,
DPH expects to realize approximately $10,633,333 in
additional revenues under this 22-month contract, with
the contractor to be paid an estimated $1,884,667, or an
overall average of 17.72 percent of the revenue collected,
for net estimated revenues to the City of $8,748,667 for
the term of the 22-month contract. Attachment II,
provided by DPH, highlights the estimated revenue and
contingency fees associated with the subject contract
agreement. As mentioned above, the actual contingency
fees paid to HA will depend on the revenue realized
during the contract period.
2. The proposed subject resolution authorizes the
Director of Public Health and the Purchaser to make
amendments to the subject contract, if needed. According
to Ms. Zmuda, this is a standard provision in all of the
DPH's contracts, which allows the DPH to make minor
changes, such as including an additional scope of work
requirement or extending a contract for a few months
while an RFP is in process, but not change the intent of
the original contract.
Approve the proposed resolution.
BOARD OF SUPERVISORS
BUDGET ANALYST
55
DEC-20-2000 14 = 18 FROM DPH-CFQ
City and County of San Francisco
Date:
Memo To:
From:
December 20, 2000
Harvey Rose
Budget Analyst
Monique Zmuda /">T,
Chief Financial Officer
to harueyrose Attachment I
Department of Public Health
Mitchell H. Katz, M.D.
Director of Health
Re:
Proposed Contract with Health Advocates, LLP
This memo is in response to questions regarding the proposed contract with Health
Advocates LLP, to provide uncompensated care recovery reimbursement services for the
Community Health Network of the Department of Public Health.
The following summarizes the RFP Process:
Date RFP Issued:
Selection Made:
September 29, 2000
November 21, 2000
Number of Bidders: 2- Both profit-making private firms
Bid Amounts: Both firms were requested to bid on services for revenue recovery of $6
million annually. Although the bid from Health Advocates was $90,000 higher than the
other qualified bidder, Health Advocates had a higher score, and thus was awarded the
contract. In contract negotiations with Health Advocates, the Department was successful
in securing a reduction equivalent to $90,000 in the contract rate for the services.
(415) 554-2600
101 Grove Street
Fil»n«m« and P»m
San Francisco, CA 94102
56
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57
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Item 9 - File 00-2185
Department:
Item:
Department of Public Healtb (DPH)
Real Estate Division (RED)
Resolution autborizing a new lease of 11,125 square feet
at 30 Van Ness Avenue for tbe Department of Public
Healtb.
Location:
Purpose of Lease:
30 Van Ness Avenue, second floor
To provide space for the DPH's Health Promotion and
Prevention unit (women's health services, traffic and
injury prevention, tobacco cessation, and HIV prevention)
which is currently located at 101 Grove Street and 1540
Market Street.
Lessor:
Lessee:
Herbst Foundation
The City and County of San Francisco, for use by the
DPH.
No. of Sq. Ft. and
Cost Per Month:
Annual Cost:
11,125 square feet at a monthly rental rate of $35,229.17
(approximately $3.17 per square foot per month). On an
annual basis, rent would total $422,750 (approximately
$38 per square foot per year).
$422,750
Utilities and
Janitorial Service:
Term of Lease:
Right of Renewal:
Provided by Lessor.
May 1, 2001 to February 28, 2006 (four years and ten
months)
Two options of five years each to extend the term of the
lease. The first option to extend would adjust the rent for
cost of living. The second option to extend would increase
the rent to 95 percent of the then fair market value for
space of comparable size, age, quality, and location within
the Civic Center area of the City.
BOARD OF SUPERVISORS
BUDGET ANALYST
53
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Source of Funds:
$70,458.34 within the existing Fiscal Year 2000-2001
DPH budget (two months, May to June of 2000, at
$35,229.17 rent per month). The amount of $70,458.34
comprises (a) $12,682.50 in State grant funds, and (b)
$57,775.84 in General Fund monies. As shown in
Attachment I provided by the DPH, the annual cost of
approximately $422,750 for the proposed lease of 11,125
square feet of space at 30 Van Ness Avenue would be
covered in the following manner: (a) $89,946 in State
grant funds, and (b) $332,804 in General Fund monies. As
noted in Attachment II provided by the DPH, funds for
the proposed lease have been included in the
Department's Fiscal Year 2001-2002 budget request. Mr.
Charles Dunn of the Real Estate Division states that the
proposed lease contains the standard clause (Section-
23.22) which permits the City to terminate the lease in
the event of non-appropriation of the necessary operating
funds.
Description:
The proposed resolution would authorize a new five year
lease of 11,125 square feet of space at 30 Van Ness
Avenue from the Herbst Foundation. This space would
accommodate the DPH's Health Promotion and
Prevention unit.
Comments:
1. The 60 employees that staff the DPH's Health
Promotion and Prevention unit are currently located in
4,293 square feet at 101 Grove Street, a City-owned
building, and 3,417 square feet at 1540 Market Street, a
leased facility, for a total of 7,710 square feet. This lease
at 1540 Market Street is on a month-to-month basis and
will be terminated on May 1, 2001. Under the proposed
lease, these 60 employees would move to 30 Van Ness
Avenue to occupy 11,125 square feet of space. The new
location at 30 Van Ness Avenue would provide DPH with
approximately 185.4 square feet per employee, which is
56.9 square feet per employee more than the current
average space of 128.5 square feet per employee.
According to Mr. Dunn, the average amount of space per
City employee ranges from 175 to 225 square feet.
Attachment II, provided by the DPH, explains why the
DPH needs 3,415, or 44.3 percent more square feet to
alleviate overcrowded conditions. Mr. Dunn further points
out that this proposed lease provides for a consolidation in
BOARD OF SUPERVISORS
BUDGET ANALYST
59
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
one location of tbe DPH Healtb Promotion and Prevention
Unit.
3. The Lessor, the Herbst Foundation, would construct,
at a maximum cost of $110,000 to the City, tenant
improvements pursuant to the DPH's specifications, as
shown in Attachment III provided by the DPH. According
to Ms. Judith Schutzman of the DPH, the Department
anticipates these improvements will be completed by May
1, 2000, which is the date that DPH employees would
move into the new office space at 30 Van Ness Avenue.
Ms. Schutzman states that- DPH's share of these tenant
improvement costs, estimated not to exceed $110,000,
have already been budgeted in DPH's Fiscal Year 2000-
2001 Operating Budget, as approved by the Board of-
Supervisors. The landlord would pay between $400,000
and $500,000 for these tenant improvements, for total
estimated tenant improvement costs of $510,000 to
$610,000. The Department would also pay for moving
expenses at an estimated cost of $15,000, and telephone
wiring and installation at an estimated cost of $100,000.
Such expenses would be paid from DPH's Fiscal Year
2000-2001 Operating Budget, according to Ms.
Schutzman.
4. As previously noted, under the present circumstances
there is no additional rental cost to the City for the 101
Grove Street space which is City-owned. The proposed
lease provides for a monthly rent of $35,229.17 for its five
year term commencing May 1, 2001. This proposed rent
of $35,229.17 is $31,538.81, or approximately 855 percent
more than the current monthly rent charged to DPH for
the Department's lease at 1540 Market Street, which is
$3,690.36, or $1.08 per square foot per month. However,
as stated in the attached memorandum from Mr. Dunn
(Attachment IV), the monthly rent charged to DPH for the
Department's month-to-month lease at 1540 Market
Street will increase on May 1, 2001, to between $9,397
and $10,251, or $2.75 to $3.00 per square foot per month.
In future years, the proposed rent of $35,229.17 at 30 Van
Ness Avenue for 11,125 square feet would be between
$24,978.17 and $25,832.17 more than the adjusted
monthly rent that would be charged to DPH for the
Department's existing lease at 1540 Market Street for
3,417 square feet, if DPH were to remain at such
BOARD OF SUPERVISORS
BUDGET ANALYST
60
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
premises, according to Mr. Dunn. However, DPH will be
occupying 3,415 square feet of additional leased space
(11,125 less 7,710 total square feet for the two offices at
101 Grove Street and 1540 Market Street.) Since the
Department is vacating 4,293 square feet of City-owned
space at 101 Grove Street, this will create 4,293 square
feet of available space.
5. Mr. Dunn reports that the proposed monthly rental
rate of $35,229.17 represents fair market value.
Recommendation: Approve the proposed resolution.
BOARD OF SUPERVISORS
BUDGET ANALYST
61
Attachment I
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62
City and County of San Francisco
Department of Public Health
Population Health & Prevention
COMMUNITY MENTAL HEALTH SERVICES
Attachment II
Page 1 of 2
Judith Schutzman, MPA
Operations Manager
1380 Howard Street, 5th Floor
San Francisco, CA 94103-2614
(415)255-3405 FAX (415)252-3015
Judy_Schutzman@dph.sf.ca. us
MEMORANDUM
Date: January 3, 2001
To: Anna Weinstein
Board of Supervisors' Budget Analyst
From: Judy Schutzman
Subject: File #00-2185
30 Van Ness Lease
The Department of Public Health proposes to relocate 60 employees of the Health
Promotion and Prevention unit from 101 Grove Street and 1540 Market Street. At
present, these units are housed in approximately 7,710 square feet of space; 4,293
square feet at 101 Grove and 3,417 square feet at 1540 Market. Of the 60 Health
Promotion staff, 48 are located at 101 Grove Street. The space at 1540 Market Street
would be abandoned once this move is accomplished.
In recent years, the Health Promotion unit has expanded significantly due to new
programs promoting pedestrian and traffic safety, breast cancer awareness, tobacco
cessation, HIV prevention and other public health concerns. As staff was added, they
were housed wherever space could be found in 101 Grove. Several employees are
doubled up in office space designed for one person. The 48 staff at 101 Grove have
less than 90 square feet per person. In addition, because this unit provides health
education services to the public, there is a significant need for public information and
other training materials as well as meeting space for presentation of programs.
DPH management is working with the Bureau of Architecture to prepare a plan to
rearrange the space at 101 Grove Street once this staff moves out. Some of the
changes contemplated include relocation of the Immunization Clinic from the 4m floor to
the 1st, moving the Epidemiology unit from 25 Van Ness to relieve overcrowding there,
and providing Birth and Death records with more space.
63
Attachment II
Fage 2 of 2
File 00-2185 30 Van Ness, page 2
The Department proposes to pay for this space with partial funding from State revenue
to the Tobacco Free and Wedge projects, approximately 21% of the total, and the
balance with general fund monies. Funds for this lease have been included in the
Department's fiscal year 2001-2002 budget request.
Should you have additional questions, please call me at 255-3405.
Cc: Monique Zmuda
Barbara Garcia
Charles Dunn, Real Estate
64
City and County of San Francisco
Department of Public Health
Population Health & Prevention
COMMUNITY MENTAL HEALTH SERVICES
Attachment III
Judith Schutzman, MPA
Operations Manager
1380 Howard Street, 5th Floor
San Francisco, CA 94103-2614
(415)255-3405 FAX (415)252-3015
Judy_Schutzman@dph.sf.ca.us
MEMORANDUM
Date: December 29, 2000
To: Anna Weinstein
Board of Supervisors' Budget Analyst
From: Judy Schutzman
Subject: File #00-2185
30 Van Ness Avenue Turn-key Build-out
The Department of Public Health staff has worked with the lessor's architect to design
space suitable for the needs of the Health Promotion and Prevention staff. The lessor
will construct these improvements and turn the space over to us upon substantial
completion. The improvements include construction of offices and low-height fixed
partitions, paint, carpeting, doors and door hardware, lighting, air conditioning, standard
electrical wiring, ceilings, code required life safety items, ADA compliance, permits and
fees, etc. As part of the economic deal, DPH will contribute $1 1 0,000 toward these
costs.
Cc: Monique Zmuda
Barbara Garcia
Charles Dunn, Real Estate Department
65
Date: 1/4/01
Sender: Charlie Dunn
To: Anna Weinstein
cc: Judy Schutzman
Priority: Normal
Receipt requested
Subject: DPH / 30 Van Ness
Anna,
As we discussed, DPH occupies space at 1540 Market St. (approx 3417 sq ft). These leases are on
"month to month" at old rental rates ($1 .08 psf /mo). DPH wants to consolidate these functions with others
from 1 01 Grove to better serve the public (both for these services and other services such as providing
immunizations at 101 Grove). Thus, Real Estate has not solicited a renewal proposal from the owners of
1 540 Market St. This notwithstanding, it is highly likely that the owner will raise the rent for these spaces
to fair market value which I estimate to be in the mid $30' s psf per year (say approximately $2.75 - $3.00
psf per mo.) There are a number of factors which would go into this rate - not the least of which would be.
tenant improvements and length of lease - which make predicting an exact rate difficult.
66
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Item 10 - File 00-2145
Department:
Item:
Lessor:
Lessee:
Locations Being
Leased:
Airport
Resolution approving a new Advertising Program Lease
between Transportation Media, Inc. and the City and
County of San Francisco, acting by and through its
Airport Commission.
City and County of San Francisco, acting by and through
its Airport Commission
Transportation Media, Inc., a division of Eller Media
Company, Inc., an Illinois-based company.
According to Mr. Bob Rhoades of the Airport, there are
144 locations for the proposed advertising, divided into
two categories:
• Wall-mounted advertising spaces in the Airport's
parking structures, transit stations, shuttle bus
interiors, non-terminal bus shelters, the rental car
center, and parking area connector tunnels.
• Silent monitors in the International Terminal's
boarding areas. Silent monitors are 27 inch high-tech
screens.
None of the proposed 144 advertising locations would be
in the Airport's North Terminal, South Terminal, or
former International Terminal.
Revenue Generated:
Under this proposed lease, Transportation Media, Inc. is
required to pay the Airport a first year Minimum Annual
Guarantee of $4,050,000 or 70 percent of gross revenues,
whichever is greater. The proposed lease states that the
Minimum Annual Guarantee shall be increased annually
by the amount of the Consumer Price Index's annual
increase (adjusted for any decrease in the annual number
of enplanements). If further advertising sites are added
to the lease, then the Minimum Annual Guarantee would
be increased on a pro rata basis, as determined by the
Airport.
BOARD OF SUPERVISORS
BUDGET ANALYST
67
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Term of Lease:
Right of Renewal:
Description:
Five years from the earlier of (a) the date on which any
advertising is installed, or (b) February 1, 2001.
Three one-year options exercisable at the Airport
Commission's sole option. Mr. Rhoades states that there
is no right of renewal beyond the maximum term of eight
years and that any future lease would be subject to a
Request for Proposal (RFP).
According to Mr. Rhoades, the Advertising Program Lease
represents a new source of revenue for the Airport. Mr.
Rhoades advises that the Airport Commission has had a
policy banning advertising inside the Airport's terminals
since the 1980s. This policy was amended in early 2000
when the Airport Commission decided to permit (a)
advertising panels in certain limited areas within the
Airport's parking structures, transit stations, shuttle bus
interiors, non-terminal bus shelters, the rental car center,
and parking area connector tunnels, and (b) silent
monitors in the International Terminal's boarding areas.
The advertisements displayed would be subject to
approval by the Airport's Design and Review Committee1.
The proposed lease prohibits advertisements which
violate the Airport Advertising Standards Policy,
including those which (a) advertise alcohol or tobacco
products, (b) espouse political or religious views, (c)
promote any illegal activity, gambling, or services in
direct competition with the Airport's business objectives,
or (d) contain offensive imagery or language.
Transportation Media, Inc. would coordinate all of the
advertisers.
Comments:
1. The RFP for the proposed lease was issued by the
Airport in July of 2000 and firms were required to submit
proposals with a Minimum Annual Guarantee of
$2,000,000 or more. According to Mr. Patrick Quinn of
the Airport, the Airport notified approximately 25 firms of
an informational conference which was held on June 28,
2000. Seven of the firms which attended were
subsequently sent a copy of the Airport's RFP. The seven
firms which received the RFP were Airport Consulting
1 The Airport's Design and Review Committee consists of Mr. Michael Allen (Project Manager,
Bureau of Design and Construction), Mr. Amur Koleini (Principal Architect, Facilities, Operations
and Maintenance), and Mr. Robin Chiang (Architect).
BOARD OF SUPERVISORS
BUDGET ANALYST
68
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Incorporated, Blazers Airport Advertising, Cartelera
Communications, Eller Media (Transportation Media,
Inc.), Foster Media, JC Decaux (Sky Sites Airport
Advertising), and Lee Fisher Associates. The Airport's
RFP was issued at the same time as the airlines
themselves issued a similar RFP for a separate
advertising program in the jet bridges (the moveable
corridors which connect the terminals to the airplanes).
Mr. Rhoades states that on October 23, 2000 the airlines
chose Transportation Media, Inc. out of the three
proposals which were submitted to the airlines (see
Comment No. 2). In response to the Airport's RFP, on
October 27, 2000 the Airport received only one proposal
from Transportation Media, Inc. which had already been
awarded the airlines' jet bridge advertising program -
contract. Attachment I, provided by the Airport, explains
why the Airport only received one bid in response to its
RFP. The responsiveness of Transportation Media, Inc.'s
proposal to the Airport RFP's minimum standards was
evaluated by a five-member evaluation team comprising
two outside consultants who are experts in design and
advertising, one senior airline representative involved in
advertising and promotions, an Airport official
responsible for exhibitions, and an Airport Finance
official. The Transportation Media, Inc. proposal included
a Minimum Annual Guarantee to the Airport of
$4,050,000 in the first year of the proposed lease, which is
$2,050,000 or 102.5 percent more than the Minimum
Annual Guarantee of $2,000,000 required under the
Airport's RFP.
2. According to Mr. Rhoades, the idea of a jet bridge
advertising program was initiated by the airlines which
own 60 domestic terminal jet bridges. The Airport
Commission approved the concept, and extended the
program to include the 17 jet bridges the Airport owns in
the new International Terminal which are operated by
the airline consortium, the San Francisco Terminal
Equipment Company, LLC (SFOTEC). This represents a
total of 77 jet bridges. According to a policy statement
approved by the Airport Commission, the airlines' jet
bridge advertising program revenues are being split 35
percent for the airlines, 35 percent for the Airport, and 30
percent for Transportation Media, Inc. This means that
BOARD OF SUPERVISORS
BUDGET ANALYST
69
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
tbe airlines and tbe Airport jointly receive 70 percent of
the gross revenues and Transportation Media, Inc.
receives 30 percent, which is comparable to the 70/30
percent split between the Airport and Transportation
Media, Inc. under the proposed lease. Mr. Rhoades states
that, once the Airport Commission authorized the jet
bridge advertising program, the airlines ran their own
competitive bid process without any involvement from the
Airport. The airlines received proposals from three firms:
(a) Transportation Media, Inc., (b) Sky Sites Airport
Advertising, an affiliate of JC Decaux, and (c)
Inplaneview, Inc. The airlines chose Transportation
Media, Inc. According to Mr. Quinn, the proposal
submitted by Transportation Media, Inc. included a
Minimum Annual Guarantee of $2,887,500 to the Airport2 ■
or 35 percent of gross receipts, whichever is greater. Mr.
Rhoades states that the Airport has already received
revenues from the jet bridge advertising program.
Attachment II, provided by the Airport, outlines the
history and financial arrangements of the jet bridge
advertising program.
3. According to Mr. Rhoades, Transportation Media, Inc.
is already booking advertisers to use the advertising
space which will be available under the proposed lease.
Since the gross advertising revenues are to be split 70
percent for the Airport and 30 percent for Transportation
Media, Inc., Mr. Rhoades notes that, given the proposed
lease's Minimum Annual Guarantee requirement of
$4,050,000, Transportation Media, Inc. must generate
annual revenues of approximately $5,785,714 in order to
achieve its 30 percent share3.
2 Under the jet bridge advertising program, the Minimum Annual Guarantee of $2,887,500 to the
Airport represents annual revenue for the Airport in the amount of $37,500 for each of the 77 jet
bridges. The airlines are guaranteed an equivalent amount. Since the gross advertising revenues
are to be split 35 percent for tbe Airport, 35 percent for the airlines, and 30 percent for
Transportation Media, Inc., given the Minimum Annual Guarantees of $2,887,500 for each of the
Airport and the airlines, Transportation Media, Inc. must generate total advertising revenues of
$8,250,000 in order to achieve its 30 percent share ($2,475,000).
3 Under the proposed advertising program lease, the amount of $4,050,000 is approximately 70
percent of $5,785,714. Under the proposed lease, in Year 1, Transportation Media Inc. must pay a
Minimum Annual Guarantee of $4,050,000, or 70 percent of its gross revenues, whichever amount is
more.
BOARD OF SUPERVISORS
BUDGET ANALYST
70
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
4. The Minimum Annual Guarantee of $4,050,000 in
Year 1 represents an average of approximately $28,125
per year for each of the 144 advertising sites. According
to Mr. Rhoades, the actual charges made for each of those
144 advertising spaces will be determined by rate cards
which are set according to market values. The proposed
lease provides for Airport verification of gross advertising
revenues through (a) a monthly gross receipts report
signed by the Lessee, (b) an unqualified year-end report
certified by a certified public accountant, (c) periodic
audits of the Lessee's gross receipts, and (d) other reports
and submissions requested at the discretion of the Airport
Director.
5. The Budget Analyst questioned why the jet bridge -
advertising program contract between the airlines and
Transportation Media, Inc. (in contrast to the subject
proposed lease between the Airport and Transportation
Media, Inc.), and the resulting revenues of at least
$2,887,500 a year for the Airport, were not subject to
Board of Supervisors approval. Mr. Rhoades states that
the jet bridge advertising contract is between the airlines
and Transportation Media, Inc. and that the Airport is
not a party to that contract. With regard to the Airport's
ability to receive revenues from the jet bridge advertising
program without first obtaining Board of Supervisors
approval, Ms. Mara Rosales and Ms. Adrienne Go of the
City Attorney's Office state that the Airport's legal
authority to receive such revenues stems from the
Airport's Lease and Use Agreements with the airlines,
which were previously approved by the Board of
Supervisors in 1981. According to Ms. Rosales and Ms.
Go, under these Lease and Use Agreements, the Airport
Director has the authority to consent to variations to the
prescribed uses of the Airport space leased by the airlines.
Therefore, Ms. Rosales and Ms. Go state that, as a
condition to granting his consent to such advertising, the
Airport Director required the airlines to share a
negotiated percentage of the resulting revenues with the
Airport. In requiring a share of the advertising revenues
in return for allowing the airlines to advertise on the jet
bridges, the Airport Director has acted within the scope of
the Lease and Use Agreements previously approved by
the Board of Supervisors. Therefore, Ms. Rosales and Ms.
BOARD OF SUPERVISORS
BUDGET ANALYST
71
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Go state that the jet bridge advertising revenues of at
least $2,887,500 to be received by the Airport directly
from the airlines do not require separate Board of
Supervisors approval.
Recommendation: Approve the proposed resolution.
BOARD OF SUPERVISORS
BUDGET ANALYST
72
JAN.04'2001 15:55 650 794 4519
CONCESSION DEV i MGMT
Attachment I
SFO
San Francisco International Airport
MEMORANDUM
P.O.Sox 8097
San Francisco, CA 94128
Tel 650.821.5000
Fax 6S0. 821. 5005
wvAv.flysfo.com
AIRPORT
COMMISSION
CITY ANO COUNTY
OtSAN FRANCISCO
WIIU5 li JROWN.ffl.
TO:
FROM:
Alan Gibson
Budget Analyst /j
Bob Rhoades
Deputy Airport Director
Business Division
SUBJECT: Request for Proposal Response
DATE: January 4, 2001
HENRY E. 6ERMAN
PPtSIOCNT
LARRY MAZiOLA
V'Cf PR($I0CNT
MICHAEL S. 5TRONSKY
LINDA S.CRAYTON
JOHN L.MARTIN
AIRPORT OIBCCTOn
This is in response to your email dated January 3, 2001 , regarding "further information
request". This memorandum is addressing question no. 2, pertaining to Transportation
Media, Inc., being the sole response to the Airport Advertising Request for Proposal.
On June 28, 2000, the Airport conducted a pre-proposal conference for the Airport
Advertising Program. Through Concession Development and Management's outreach,
twenty- five companies were identified through a national search and were issued the pre-
proposa] document.
Seven advertising companies responded and attended the pre-proposal informational
conference (a list of the companies have been emailed to you). Transportation Media,
Inc. was the only company to respond and to participate in the proposal process of the
Airport Advertising Program.
Separately, Transportation Media, Inc. and JCDecaux/SkySites participated m a separate
request for proposal issued and awarded (on behalf of the airlines) the loading bridge
advertising program. Transportation Media, Inc., being the successful proposer, was
awarded with this operating agreement.
cc: Patrick Quinn
Concession Development and Management
73
JAN.04'2001 15:55 650 794 4519
CONCESSION DEV I HGMT
Attachment
San Francisco International Airport
MEMORANDUM
P.O. Box 6097
S*n Francisco. CA 94128
Tel 650.821. SOOO
Fax 650.821.5005
www.flyjfo.com
DATE: January 4, 2001
Amronr
COMMISSION
CITY ANO COUNTY
OF SAN FRANCISCO
WILL if L.BROWN. JR.
MAYOR
henry j. hum
LARKY MAZZOLA
Vice PRCSIDENT
MICHAtl 5. 5THUNJltr
LINQA S.CHAYTON
JOHN L MARTIN
aikcoht omecTOK
TO: Alan Gibson
Budget Analyst
FROM: Bob Rhoades
Deputy Airport Director
Business Division
SUBJECT: Loading Bridges
In response to your email dated January 3, 2001, regarding "further information request",
this memorandum is addressing question no.3, pertaining to the legal authority the
airlines control the loading bridge advertising space and revenues.
In February 2000, the Airport amended its long standing position on commercial
advertising in certain non-terminal areas. One of the areas the airport expanded included
the airline-owned loading bridges in the domestic terminals. In order to allow the airlines
to commercially advertise in their loading bridges, the airport made an agreement with
the airlines that all revenues would be split in half between the Airport and the airlines.
In return, the Airport provided the airlines the same opportunity with the loading bridges
in the international terminal, which the Airport owns.
AvAirPros conducted a Request for Proposal (RFP) for the loading bridges on behalf of
the airlines to facilitate the RFP process. The contract had three proposers:
Transportation Media, Inc., A Division of Eller Media; JCDecaux - SkySites; and
InPlaneView. Transportation Media, Inc. was awarded the contract based on their
proposal.
74
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Item 11 - File 00-1252
Department:
Item:
Amount:
Source of Funds:
Description:
Port of San Francisco
Hearing to consider the release of reserved funds in the amount
of $460,000 for fire protection improvements at Pier 50,
including construction of a 12 inch ductile iron water main at
Pier 50, for use as part of the $1,101,000 Piers 48 and 50 Fire
Protection Project.
$460,000
San Francisco Harbor Operating Fund
In November of 1996, (File 101-96-19) the Board of Supervisors
placed $1,329,000 on reserve for capital improvement projects
pending the Port's selection of contractors and the submission of
budget details. On four occasions since that time, the Board of
Supervisors has released portions of the reserved funds for
various projects, as indicated below:
Description
Date
Amount
Funds Initially Placed on Reserve
Nov. 1996
$1,329,000
Date
Amount
Reserved Funds Released
Released
Released
-Pier 1 lA, Emergency Wall Repairs
May 1998
$137,960
-Pier 47-A, Design Services for
Reconstruction of Pier
May 1998
39,622
-Agricultural Building Design Work
May 1998
26,000
-Agricultural Building East Entry
Stair Replacement
May 2000
202,900
Total Amount Released
406.482
Remaining Reserved Funds
$922,518
According to Ms. Imani Haygood of the Port, $460,000 of these
funds were originally allocated in the Port's FY 1996-1997
Capital Projects budget for construction of fire walls at Pier 50,
Shed A to improve fire protection at the Port. After reviewing
the project, however, the Fire Marshall approved a sprinkler
system as the best method of fire protection at Pier 50.
BOARD OF SUPERVISORS
BUDGET ANALYST
75
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Tbe proposed release of reserved funds would release $460,000
of the remaining $922,518 in reserved funds to contribute a
portion of the total of $1,101,000 in total funds required to
design and construct a sprinkler system, as well as other
improvements at Pier 50. Specifically, components of the project
would include (a) replacement of the current eight inch water
main with a 12 inch ductile iron water main1, (b) installation of
a new fire sprinkler system for Pier 50, Shed A, (c) installation
of new alarms and fire controls for Pier 50, Sheds A and D, (d)
consultation by the San Francisco Water Department (see
Comment No. 2), and (e) design consultation for construction.
The proposed release of $460,000 in reserved funds plus
$394,000 in existing capital appropriations plus $247,000 in
funds received from a fire insurance settlement would fund the
total project cost of $1,101,000.
The subject release of reserved funds would leave a total of
$462,518 remaining on reserve ($922,518 in currently reserved
funds less $460,000 in funds requested).
Budget: A summary project budget and list of project funding sources is
as follows:
Project Budget
Construction:
New 12 inch ductile iron water main $588,300
New fire sprinklers, alarms, and
controls for Pier 50, Shed A 249,600
New alarms and controls for Pier 50,
Shed D 16.730
Total base construction $854,630
10% contingency 85.463
Total Construction $940,093
SFWD Fire Main Services (actual cost) 143,000
Design Services (actual cost) 17.907
Total Project Budget $1,101,000
1 Ductile cast iron is a form of cast iron that is less likely to succumb to cracking or corrosion than
older forms of iron. It represents an improvement over the material of which the current eight inch
water main is composed.
BOARD OF SUPERVISORS
BUDGET ANALYST
76
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Project Funding
Proposed Release of Reserved Funds $460,000
FY 1999-2000 Port Capital Budget 394,000
Pier 48 Fire Insurance Settlement 247,000
Total Project Funding $1,101,000
Comments: 1. According to Ms. Haygood, the proposed. project is anticipated
to commence on or around February 1, 2001, and is expected to
be completed by April 30, 2001.
2. Ms. Haygood states that the $143,000 budgeted for the San
Francisco Water Department represents payment for
engineering review and approval of proposed fire suppression
improvements, some materials for integrating the proposed 12
inch water main into the City's water infrastructure, and other
miscellaneous engineering fees. According to Ms. Haygood, the
$17,907 the Department expended for design services was for
design work conducted by the Utilities Engineers Bureau of the
Public Utilities Commission (PUC). According to Ms. Haygood,
the services provided by the Water Department and the Utilities
Engineers Bureau were completed in March of 2000. These
services were funded from FY 1999-2000 Port Capital Budget
funds previously appropriated and allocated for the subject
$1,101,000 project, according to Ms. Haygood.
3. According to Ms. Haygood, on September 14, 2000, the Port
issued an Invitation for Bids to construct fire protection
improvements as part of the Piers 48 and 50 Fire Protection
Project. A Request For Proposal (RFP) was sent to the list of
approved Human Rights Commission (HRC) contractors,
minority newspapers, trade journals and construction-related
publications. The subcontracting goals for this project were 17
percent MBE participation and six percent WBE participation.
On October 31, 2000 the Port received four bids. The Port
engineering staff and the HRC reviewed the submitted bids, and
selected D'Arcy and Harty, Inc., who bid $854,630 as the lowest,
responsive bidder meeting the Project subcontracting goals. The
following table lists the contractors that responded to the Port's
RFP, and their respective bids:
BOARD OF SUPERVISORS
BUDGET ANALYST
77
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Contractor
Quote
Bidding
Discounl
Net Final
Bid
D'Arcy & Harty
Construction, Inc.
$854,630
5% LBE
$811,899
Proven Management, Inc.
931,250
10% MBE
838,125
Alpha Bay Builders, Inc.
947,819
10% MBE
853,037
A.Y. Seto Corporation
1,864,000
10% MBE
1,677,600
Recommendation:
The Attachment, provided by the Port, is the bid summary
document for the construction contract amount of $854,630.
4. According to Ms. Haygood, the water main that currently
supplies Sheds A and D at Pier 50 is eight inches in diameter,
and has suffered some corrosion since it was initially installed in
1926. Further, Ms. Haygood reports that the current eight inch
main is not large enough to supply Pier 50 the volume of water
necessary for proper operation of the proposed sprinkler system.
The proposed release of reserved funds would allow the Port,
along with other improvements, to replace the eight inch main
with a 12 inch ductile iron water main, which would have the
capacity to supply an adequate volume of water to the proposed
sprinkler system at Pier 50, Shed A. Ms. Haygood notes that, in
addition to providing additional fire protection to the Port, the
new water main would also supply irrigation water to the new
China Basin Shoreline Park, which is currently under
construction. Ms. Haygood states that the new irrigation system
would consist of sprinklers and other systems to supply grass
and trees located at the park with adequate supplies of water.
Approve the requested release of reserved funds.
BOARD OF SUPERVISORS
BUDGET ANALYST
78
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B • : e
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Item 12 - File 00-2163
Department:
Item:
Services to be
Performed:
Description:
District Attorney
Resolution concurring witb the Controller's certification
that assistance to certain victims of crime and education
in community anti-street violence can continue to be
practically performed for the District Attorney's Victim
Witness Assistance Program by a private contractor for a
lower cost than similar work services performed by City
employees.
Victim Witness Services for the District Attorney's Victim
Witness Assistance Program
Victim Witness Services for the District Attorney's Victim
Witness Assistance Program consist of helping lesbian,
gay, bisexual, and transgender victims and witnesses to
cooperate with the criminal justice system in
prosecutions.
Charter Section 10.104 provides that the City may
contract with private firms for services that can be
practically performed for a lower cost than similar work
performed by City employees.
The Controller has determined that contracting with
Victim Witness Services for FY 2000-2001 would result in
estimated savings as follows:
City-Operated Service Costs
Salaries
Fringe Benefits
Total
Contractual Services Cost
Estimated Savings
Lowest
Salary
Step
$137,656
37.485
Highest
Salary
Step
$163,176
41.497
$175,141 $204,673
(113.175) (114.488)
$61,966 $90,185
BOARD OF SUPERVISORS
BUDGET ANALYST
80
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Comments:
1. A contract for Victim Witness Services was first
certified under Proposition J as required by Charter
Section 10.104 in 1981 and such services have been
provided by an outside contractor, Community United
Against Violence (CUAV), a non-profit corporation, since
that time. Ms. Linda Alexander of the District Attorney's
Office advises that Victim Witness Services are provided
on a sole-source basis by CUAV. According to Ms.
Alexander, since 1981 CUAV has been the sole provider of
(a) assistance to lesbian, gay, bisexual, and transgender
victims of crime and (b) hate-crime prevention services,
and is therefore uniquely qualified to provide such
services.
2. The Contractual Services Cost used for the purpose of "
the analysis is based on (a) CUAVs estimated FY 2000-
2001 costs to provide victim witness services, and (b) the
salary and fringe benefits of 0.1 FTE 8131 Victim Witness
Investigator II position in the District Attorney's Office to
monitor the contract.
3. The one-year contract with CUAV for FY 2000-2001
commenced on July 1, 2000. Therefore, the proposed
resolution should be amended to provide for retroactivity.
According to Ms. Alexander, delays in processing the
contract resulted in a delay in bringing the proposed
resolution to the Board of Supervisors. The Budget
Analyst notes that the District Attorney's office has
submitted the above contract, after that contract has
begun, each of the last three years. The budget analyst
further notes that the Department has provided the same
explanation of this for action each of the last three years.
Recommendation:
4. The Attachment to this report, provided by the District
Attorney's Office, is the Controller's supplemental
questionnaire, with the responses from the District
Attorney's Office.
Amend the proposed resolution to provide for retroactivity
and approve the proposed resolution as amended.
BOARD OF SUPERVISORS
BUDGET ANALYST
81
t\ ,_ <_d.V_il.lii. L
CHARTER 10.104.15 (PROPOSITION J) QUESTIONNAIRE
DEPARTMENT: District Attorney'?; Office
CONTRACT SERVICES: Community United Against Violence_
CONTRACT PERIOD: July 1 . 9000 thru June 30. 2001
(1) Who performed the activity/service prior to contracting out?
No one performed these services prior to CUAV.
(2) How many City employees were laid off as a result of contracting out?
There have not been and will not be any City employees laid off as a result of the
contract.
(3) Explain the disposition of employees if they were not laid off.
N/A
(4) What percentage of City employees' time !s spent of services to be contracted out?
N/A
(5) How long have the services been contracted out? Is this likely to be a one-time or an ongoing
reque.it for contracting out?
The services have been contracted out since 1983. This is an on-going contract with
annual requests.
(6) What '.ras the first fiscal year for a Proposition J certification? Has it been certified for each
subsequent year?
The contract precedes Proposition J. The Contract has been certified each year since
Proposition J passed.
(7) How will the services meet the goals of your MBE/WBE Action Plan?
CUAV is a 501 ©3 non-profit. I do not believe it falls under MBEAA/BE categories (as it
is not "owned"). 50% of the Board are people of color.
(8) Does lhe proposed contract require that the contractor provide health insurance for its employees?
Even If not required, are health benefits provided?
CUAV provides health insurance for it's employees.
(9) Does lhe proposed contractor provide benefits to employees with spouses? If so, are the same
benefits provided to employees with domestic partners? If not, how does the proposed contractor
compi/ with the Domestic Partners ordinance?
The contractor complies with the Domestic Partnership ordinance, providing benefits to
both spouses and domestic partners.
Department Representative: Linda Alexander
Telephone Number (41.^ 553-9044
82
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Item 13 - File 00-2186
Department:
Item:
Department of Telecommunications and
Information Services (DTIS)
Department of Administrative Services, Real
Estate Division (RED)
Resolution authorizing exercise of option regarding
an extension an existing lease at One Market
Plaza, on behalf of the Department of
Telecommunications and Information Services.
Location:
Lessor:
Lessee:
Purpose of Lease:
One Market Plaza
EOP-One Market, L.L.C., a Delaware Corporation
City and County of San Francisco, DTIS
Space for the operation of the primary data center
for networked computer and telecommunications
systems used by the City and County of San
Francisco.
No. of Square Feet
and Cost Per Month
Payable by the City
to EOP-One Market:
Term of Original
Lease:
Term of Proposed
Extension:
Right of Renewal:
Utilities and Janitor
Services:
19,051 square feet at approximately $127,007 per
month (approximately $6.67 per square foot per
month) or approximately $1,524,080 annually. The
rent would be adjusted annually for any increases
in operating and/or Property Tax costs, not to
exceed five percent over any previous year.
May 12, 1993 through January 31, 2001, with two
five-year options to extend.
February 1, 2001 through January 31, 2006 (the
first of two five-year options to extend).
One additional five-year term, from February 1,
2006 through January 31, 2011.
Landlord pays standard building services and
utilities, with the exception of special
environmental services necessary for data center
BOARD OF SUPERVISORS
BUDGET ANALYST
83
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Description:
Comments:
operations (such as high volume air conditioning
and power requirements)1.
In 1993, the Board of Supervisors authorized the
Director of Property to enter into a lease that
allowed the relocation of the DTIS City data center
from the basement of City Hall to One Market
Plaza (File No. 64-93-5). The proposed resolution
would authorize the Department to exercise the
first of two five-year options, extending the current
lease from February 1, 2001 through January 31,
2006. Unless extended, the current lease will
expire on January 31, 2001.
1. According to Mr. Steve Legnitto of RED, under
the terms of the original lease, the City assumed
occupancy of One Market Plaza for an initial period
of approximately 7 years and 8V2 months at the
rate of $15.50 per square foot, annually, or
approximately $1.29 monthly. Under the terms of
this lease, the City is allowed two options to extend
for five years each, with the rent to be adjusted for
each five-year extension period to a mutually
agreed upon fair market rate, according to Mr.
Legnitto.
2. According to Mr. Legnitto, the proposed lease
rate of $6.67 per square foot per month, or $80 per
square foot annually, which is an increase of
approximately 416 percent, represents fair market
value. According to Mr. Legnitto, DRE initially
rejected the proposed rate of $80 per square foot
annually as too high. After an extensive review of
available market data, however, DRE determined
that the landlord's estimate of market value was
considered to be the fair market value, according to
Mr. Legnitto. Mr. Legnitto notes that subsequent
to settling on the rate of $80 per square foot
annually for the proposed lease extension, two
other tenants entered into leases at One Market
' According to Mr. Steve Legnitto of RED, electricity, gas and water costs are split between the landlord
and the City according to a formula that determines a standard level of use for office space. The landlord
pays for "normal office use" of those utilities, and the City pays for use that is in excess of this standard
level of use for office space.
BOARD OF SUPERVISORS
BUDGET ANALYST
84
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Plaza at the rates of $90 and $115 per square foot
annually.
3. Under the original lease agreement, the City is
currently paying $15.50 per square foot annually
(approximately $1.29 per square foot per month) for
a total annual rent of $295,290. The proposed lease
rate would therefore represent an increase of
$64.50 per square foot annually ($80 less the
current rate of $15.50), or a total increase of
$1,228,790 annually ($1,524,080 less the current
annual rate of $295,290) or an approximate 416
percent increase over the current lease rate. Mr.
Legnitto explains, however, that DTIS initially
took occupancy of the space under extremely
favorable circumstances. According to Mr.
Legnitto, the prior tenant of One Market Plaza,
The Del Monte Corporation, had used the subject
space as a data center. Consequently, many
existing infrastructure improvements to the space
that are particular to data center operations were
already in place. Additionally, Mr. Legnitto notes
that Del Monte was in the process of downsizing its
operations, and, for purposes of expediency,
arranged for DTIS to assume occupancy of the
property for approximately half the market rate at
that time, according to Mr. Legnitto2. While the
current rent paid by the City for One Market Plaza
under the original lease is $15.50 per square foot,
annually, Mr. Legnitto estimates the fair market
value of One Market Plaza in 1993 was roughly $30
per square foot, annually.
According to Mr. Legnitto, the large increase in
rent is a result of a) the City having paid
significantly below the market rate in the original
lease and b) significant rent increases in the
commercial real estate market since 1993.
4. According to Mr. Legnitto, the option of
relocating the data center to less expensive space
would not be practical unless and until City-owned
2 Subsequent to the City entering into the lease for One Market Plaza, the property was sold, along with the
City's lease, to EOP-One Market, LLP, who is the current landlord.
BOARD OF SUPERVISORS
BUDGET ANALYST
85
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
space becomes available. Mr. Legnitto states that
the eventual relocation of the DTIS data center will
be extremely costly because a) new space must be
improved to meet specific requirements of data
center operations, which includes addition of
special air conditioning and electrical systems
infrastructure3, and b) the DTIS data center
operates 24 hours a day, and the move would
require temporary duplication of many information
systems so as not to interrupt or damage those
systems. Thus, according to Mr. Legnitto, because
the transaction costs associated with relocation of
the data center are very high, RED and DTIS
would prefer to wait until City-owned space, such
as the new City construction at 525 Golden Gate
Avenue, is available to ensure that the next
relocation of the data center will be permanent.
5. According to Mr. Legnitto, under the terms of
the current lease the City would have the right to
sublet the current space at One Market Plaza if the
City relocated the DTIS data center prior to
completion of the proposed five-year extension. Mr.
Legnitto notes that the agreement also contains the
standard City contract provision which permits the
City to terminate the lease in the event of non-
appropriation of the necessary operating funds.
6. According to Ms. Kathryn Hile of DTIS, the
funds DTIS receives from City Departments for
computer and telecommunications services
rendered are from both General Fund supported
and non-General Fund supported departments. In
the aggregate, these reimbursements to DTIS from
City departments are made up of approximately 16
percent non-General Fund monies and 84 percent
General Fund monies, according to Ms. Hile. Thus,
Ms. Hile estimates that 84 percent of the cost of the
3 Neither DTIS nor RED currently have current estimates as to the expected cost of making necessary
improvements to any new space for DTIS. However, the City and previous landlord made approximately
$1,630,965 in improvements to One Market Plaza pnor to the City taking occupancy of the site in 1993.
These additional improvements were needed despite the fact that extensive data center infrastructure
already existed at the site. Further, Mr. Cuni Takeshita of DTIS states that the Department made a rough
estimate in 1998, and determined that the cost of building infrastructure in a new space and acquiring
equipment necessary for moving the data center would be in excess of 510,000,000.
BOARD OF SUPERVISORS
BUDGET ANALYST
86
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
proposed $1,228,790 increase in annual rent, or
approximately $1,032,183 of tbat increase, will
represent increased General Fund expenditures.
7. According to Ms. Hile, DTIS anticipated an
increase in rent wben formulating its FY 2000-
2001 budget, and included in its budget funds
sufficient to meet the increased cost of the proposed
lease for the last 5 months of the 2000-2001 fiscal
year, effective February 1, 2001.
Recommendation: Approve the proposed resolution.
BOARD OF SUPERVISORS
BUDGET ANALYST
87
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Item 14 -File 00-2217
Department:
Item:
Amount:
Source of Funds:
Description:
Police (SFPD)
Hearing to consider the release of reserved funds for the
Police Department in the amount of $4,297,098 to fund
overtime expenditures.
$4,297,098
Police Department FY 2000-2001 General Fund Budget
The SFPD's FY 2000-2001 General Fund budget includes
budgeted overtime expenditures of $12,842,315. The
Finance and Labor Committee placed a total of $4,297,098
of this amount on reserve, leaving $8,542,217 available
for expenditure.
The table below provides a summary of overtime spending
to date and projected spending for FY 2000-2001, as well
as spending to date and projections for all Police
Department General Fund Salary and Fringe Benefit
accounts based on the Controller's payroll records.
Controller's Projection - Police Department General Fund Expenditures for
Overtime and total Salaries and Fringe Benefits based on Expenditures
through December 8, 2000
Actual
Expenditures Projected
Through Pay Expenditures Projected Surplus
FY 2000-2001 Period Ending Through July 30, (Deficit)
Budget 12/08/2000 2001 *
Overtime
All Salaries and Fringe
Benefits Including
Overtime
$12,842,315 $7,658,749 $16,587,343 $(3,745,028)
196,392,203 86,948,008 195,747,064 645,139
Projection based on spending at the level of the pay period ending
12/08/2000 for the remainder of the Fiscal Year.
BOARD OF SUPERVISORS
BUDGET ANALYST
88
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
As summarized in the table above, the Controller's latest
projection report for salary and fringe benefit expenditures
(including overtime) shows that:
• As of the pay period ending December 8, 2000, the SFPD has
incurred General Fund overtime expenditures of $7,658,749.
• Through December 8, 2000 (or 11.5 of 26.0 pay periods in FY
2000-01) the SFPD has already expended 59.6 percent of its
total overtime appropriation of $12,842,315, and 89.6 percent
of its available, unreserved overtime funding of $8,542,217.
• Based on overtime expenditures incurred during the pay
period ending December 8, 2000, the Controller's projection
indicates that the SFPD will spend a total of $16,587,343 on
overtime which is 29.2 percent or $3,745,028 more than the
Department's total FY 2000-2001 overtime appropriation of
$12,842,315.
• For all Salaries and Fringe Benefit Expenditures, including
Overtime, the Controller's projection indicates that the SFPD
will incur total expenditures of $195,747,064 in FY 2000-
2001, which is $645,139 or 0.33 percent less than the FY
2000-2001 budget amount of $196,392,203.
• The SFPD spending plan currently projects deficit spending
for overtime of $3,788,277, which is $43,249 more than the
Controller's projection. However, for all Salaries and Fringe
Benefits (including overtime) the SFPD projects a surplus of
only approximately $93,480 which is $551,659 less than the
Controller's latest projected salary and fringe benefit surplus
of $645,139 (See Comment 1 below).
Based on a projected salary and fringe benefit surplus of
$93,480, it is unlikely that the SFPD will require a
supplemental appropriation in FY 2000-2001 assuming the
Board of Supervisors releases a separate reserve of $1,700,195
for uniform salaries (see Comment 2 below).
BOARD OF SUPERVISORS
BUDGET ANALYST
89
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Comments: 1. The SFPD's projected FY 2000-2001 surplus of $93,480 is
comprised of the following elements:
Projected Surplus
Expenditure Object (Deficit)
Miscellaneous Salaries $ 202,042
Uniform Salaries 2,567,041
Temporary Salaries (118,264)
Premium Pay (327,154)
Overtime (3,788,277)
Holiday Pay 161,712
Fringe Benefits 1.396.380
Total FY 2000-2001 Deficit $ 93,480
2. During the Finance and Labor Committee's hearings on
the proposed FY 2000-2001 budget in June of 2000, the Finance
and Labor Committee reserved an additional $1,700,195
"pending a plan for the hiring and training of additional Police
Officers to bring the Department's staffing up to 1,971 Police
Officers as required by Charter Section 4.127". The SFPD's FY
2000-01 budget proposed hiring 200 new Police Officers.
3. The SFPD began FY 2000-2001 with 2,077 Police Officers
(excluding the Airport Police). Since that time, the Department's
sworn staffing has changed as shown in the table below:
Changes to Police Sworn Staffing Since July 1, 2000
(Excluding Airport Police)
Sworn Staffing on July 1, 2000 2,077
New Hires
Academy Class Started 9/18/2000 44
Attrition:
Service or Disability Retirement (37)
Resignations (18)
Recruits discharged from Academy (7)
Deaths (2)
Sworn Staffing as of January 8, 2001 2,057
BOARD OF SUPERVISORS
BUDGET ANALYST
90
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
In addition to the current sworn staffing of 2,057, the SFPD
hired 46 new recruits who began the Police Academy on January
8, 2001.
4. The SFPD's hiring schedule, presented to the Finance and
Labor Committee during the June of 2000 budget hearings,
projected that 200 new Police Officers would be hired during FY
2000-2001 as shown below:
FY 2000-2001 Police Hiring Plan Presented to Finance
and Labor Committee in June of 2000
Number of Police Officers
Date Scheduled for Hire
9/1/2000 40 new recruits
10/28/2000 20 lateral transfers
11/25/2000 40 new recruits
3/03/2001 40 new recruits
3/31/2001 20 lateral transfers
06/09/2001 40 new recruits
Total 200 new hires
As noted above, to date, the SFPD has actually hired a new
recruit class of 44 (on September 18, 2000) and a second new
recruit class of 46 (on January 8, 2001) for a total of 90 new
hires during FY 2000-2001. Of the new recruit class of 44 hired
on September 18, 2000, seven were released from the Police
Academy during their initial training period.
The original hiring plan has been revised by the SFPD since it
was presented to the Finance and Labor Committee in June of
2000. During the remainder of the current fiscal year, the SFPD
hiring projection calls for the hiring of 115 additional Police
Officers, including 25 lateral transfers in March of 2001; 45 new
recruits in April of 2001 and 45 new recruits in late June of
2001. If this hiring schedule is met, the SFPD will have hired a
total of 205 (90 plus 115) new Police Officers during FY 2000-
2001 or 5 more than originally anticipated. As noted above,
seven of the 44 new recruits were released from the Academy
class that began September 18, 2000, and it would be expected
that some of the new hires during the remainder of this Fiscal
BOARD OF SUPERVISORS
BUDGET ANALYST
91
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
Year would likewise not complete tbeir initial training for a
variety of reasons.
The current, revised SFPD Hiring Plan is summarized in the
table on the following page.
FY 2000-2001 Revised Police Actual Hires and Hiring
Plan as of January 8, 2001
Number of Police Officers
Date Scheduled for Hire
Hired
9/18/2000 44 new recruits
1/08/2001 46 new recruits
Planned Hires
March of 2001 25 lateral transfers
April of 2001 45 new recruits
June of 2001 45 new recruits
Total 205
5. According to Captain John Goldberg, Commanding Officer
of the SFPD Fiscal Division, the SFPD is currently preparing a
potential request for the expenditure of approximately $800,000
in order to strengthen the SFPD's recruitment and hiring efforts
using the Finance and Labor Committee's reserve of $1,700,195
discussed in Comment 2, above as a source of funds. However,
as noted previously in this report, the SFPD's spending plan
currently results in a projected yearend surplus of only $93,480
assuming that the reserve of $1.700,195 is released bv the
Finance and Labor Committee. Therefore, a request for new
funding of an estimated $800,000 for recruitment and hiring
would require a supplemental appropriation unless additional
funds can be identified within the SFPD's existing budget.
BOARD OF SUPERVISORS
BUDGET ANALYST
92
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
6. The Budget Analyst has reviewed the SFPD's FY 2000-
2001 spending plan which, as noted previously, results in a
projected salary and fringe benefit surplus of $93,480, and
therefore the SFPD will not require a supplemental
appropriation in FY 2000-2001. This assumes that the Board of
Supervisors releases the previously noted reserve of $1,700,195
for uniform salaries. However, in reviewing the Department's
spending plan, the Budget Analyst has found that the SFPD has
not accounted for and included all of the General Fund resources
currently approved in the Department's FY 2000-2001 budget.
Specifically, the spending plan estimates yearend total
expenditures based on year to date total General Fund spending
on salaries (including overtime) and fringe benefits, through the
pay period ending December 8, 2000. However, the SFPD budget
includes a General Fund Annual Project appropriation for the
SFPD's Accelerated Hiring Project which has budgeted General
Fund salary and benefit expenditures of $582,000. If these
additional resources, which have not been accounted for in the
SFPD's FY 2000-2001 spending plan, are incorporated in the
SFPD's spending plan, the yearend projected surplus of $93,480
increases to $675,480 ($93,480 plus the additional budget
resources of $582,000). According to Captain Goldberg, the
SFPD spending plan will be corrected to include the General
Fund project resources contained in the SFPD budget.
7. During the review of the proposed FY 2000-2001 SFPD
budget in June of 2000, the Budget Analyst reported to the
Board of Supervisors that the Police Department's recommended
appropriation for overtime expenditures appeared to be
underbudgeted by $2,250,000 compared to projections of FY
1999-2000 police overtime projections available at that time. In
fact, the SFPD is now estimating that their overtime has been
underbudgeted by $3,788,277. Also, the Budget Analyst
recommended reductions to the SFPD proposed FY 2000-2001
budget of $1,645,025, which included reductions of $1,338,525
for Uniform Salaries and related Fringe Benefits. At that time,
the Budget Analyst noted that the reductions of $1,333,525 to
the SFPD proposed budget for Uniform Salaries and related
Fringe Benefits would not impair the SFPD's ability to fund its
planned hiring of 200 new Police Officers during FY 2000-2001.
As noted in Comment 1 of this report, the SFPD's current
spending plan projections show an anticipated surplus of
$2,567,041 for Uniform Salaries and $1,396,380 for related
Fringe Benefits, or a total surplus of $3,963,421. This surplus is
BOARD OF SUPERVISORS
BUDGET ANALYST
93
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
projected even after accounting for tbe SFPD plan to complete
the scheduled hiring of 205 new Police Officers during the Fiscal
Year.
The Police Department disagreed with the Budget Analyst's
recommendation which was not accepted by the Finance and
Labor Committee. By allowing the Police Department to
maintain the $1,338,545 in its budget, the Police Department
was able to spend more money on overtime which is presently
anticipated to exceed the Police Department's budgeted overtime
by $3,788,277, as previously noted.
Summary: The Finance and Labor Committee has reserved a total of
$4,297,098 out of the SFPD's total overtime appropriation of
$12,842,315. The SFPD is now requesting a release of that
reserve. Based on the rate of spending on Police overtime
between July 1, 2000 and December 8, 2000, the Controller's
most recent data result in a yearend deficit projection of
$3,745,028 in overtime, and a yearend surplus of $645,139 for
all General Fund Salaries and Fringe Benefits including
overtime.
The SFPD's internal spending plan projections estimate that by
the end of FY 2000-2001, the overtime deficit will be $3,788,277.
Overall, the SFPD spending plan, once corrected to account for
General Fund resources budgeted for the Accelerated Hiring
Project, will result in an overall projected salary and benefit
surplus of $675,480. Therefore, a supplemental appropriation
will not be required for the SFPD assuming a separate reserve
of $1,700,195 is released by the Finance and Labor Committee.
However, if the SFPD requests additional estimated funding of
$800,000 for recruitment and hiring, a projected supplemental
appropriation would be required based on the current projected
surplus of $675,480.
The SFPD's original budget for FY 2000-2001 called for the
hiring of 200 new Police Officers during the fiscal year. To date,
actual hiring has been delayed somewhat, but the SFPD still
anticipates that they will be able to successfully hire a total of
205 new Police Officers by the end of the Fiscal Year.
BOARD OF SUPERVISORS
BUDGET ANALYST
94
Memo to Finance and Labor Committee
January 17, 2001 Finance and Labor Committee Meeting
The Budget Analyst's projection that Police Overtime was
underbudgeted by at least $2,250,000 and that Uniform Salaries
and related Fringe Benefits was overbudgeted by $1,338,525, as
reported to the Finance and Labor Committee in June of 2000
was, in fact, correct. This has permitted the SFPD to spend
substantially more money on overtime then authorized by the
Board of Supervisors. Such overtime spending is presently
anticipated to exceed the Police Department's budgeted overtime
by $3,788,277.
The Budget Analyst will provide the Finance and Labor
Committee with an updated FY 2000-2001 budget status report
when tbe SFPD submits their request for release of the separate
reserve of $1,700,195 later in the Fiscal Year.
Recommendation: Approve the requested release of $4,297,098 in reserved
overtime funds.
Harvey M. Rose
Supervisor Yee
President Ammiano
BOARD OF SUPERVISORS
BUDGET ANALYST
95
City and County of San Francisco
Meeting Minutes
Finance and Labor Committee
Members: Supervisors Leland Yee, Tom Ammiano and Mark Leno
Clerk: Gail Johnson
City Hall
1 Dr. Carlton B.
Goodlett Place
San Francisco, CA
94102-4689
Wednesday, January 24, 2001
10:00 AM
Regular Meeting
City Hall, Room 263
Members Present: Leland Y. Yee, Tom Ammiano, Mark Leno.
MEETING CONVENED
The meeting convened at 10:06 a.m.
010041 [Memorandum of Understanding Amendment No. 3 - Electrical Workers, Local 6]
Ordinance implementing Amendment No. 3 to the 1997-2001 Memorandum of Understanding between the
International Brotherhood of Electrical Workers, Local 6 and the City and County of San Francisco
reconfirming the agency shop provision thereof effective July 1, 2000. (Human Resources Department)
1/5/01 , RECEIVED AND ASSIGNED to Finance and Labor Committee.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Alice Villagomez, Deputy Director, Employee
Relations Division, Department of Human Resources.
RECOMMENDED by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
010042 [Memorandum of Understanding Amendment No. 3 - Glaziers, Local 718]
Ordinance implementing Amendment No. 3 to the 1997-2001 Memorandum of Understanding between the
Glaziers, Architectural Metal and Glass Workers, Local Union 718 and the City and County of San Francisco
reconfirming the agency shop provision thereof effective July 1, 2000. (Human Resources Department)
1/5/01 , RECEIVED AND ASSIGNED to Finance and Labor Committee.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Alice Villagomez, Deputy Director, Employee
Relations Division, Department of Human Resources.
RECOMMENDED by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
010043 [Memorandum of Understanding Amendment No. 4 - Laborers, Local 261]
Ordinance implementing Amendment No. 4 to the 1997-2001 Memorandum of Understanding between the
Laborers International Union, Local 261 and the City and County of San Francisco reconfirming the agency
shop provision thereof effective July 1, 2000. (Human Resources Department)
1/5/01, RECEIVED AND ASSIGNED to Finance and Labor Committee.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Alice Villagomez. Deputy Director. Employee
Relations Division, Department of Human Resources.
RECOMMENDED by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
City and County of San Francisco
Printed at S: 13 PU
Finance and Labor Committee
Meeting Minutes
January 24, 2001
010044 [Memorandum of Understanding Amendment No. 3 - Machinists, Local 1414]
Ordinance implementing Amendment No. 3 to the 1997-2001 Memorandum of Understanding between the
Machinists Union, Local 1414, International Association of Machinists and Aerospace Workers, Machinists
Automotive Trades District Lodge 190 and the City and County of San Francisco reconfirming the agency shop
provision thereof effective July 1, 2000. (Human Resources Department)
1/5/01, RECEIVED AND ASSIGNED to Finance and Labor Committee
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Alice Vdlagomez. Deputy Director, Employee
Relations Division, Department of Human Resources.
RECOMMENDED by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
010045 (Memorandum of Understanding Amendment No. 2 - Pile Drivers, Local 34|
Ordinance implementing Amendment No. 2 to the 1997-2001 Memorandum of Understanding between the Pile
Drivers, Divers, Carpenters, Bridge, Wharf and Dock Builders, Local Union No. 34 and the City and County of
San Francisco reconfirming the agency shop provision thereof effective July 1, 2000. (Human Resources
Department)
1/5/01 , RECEIVED AND ASSIGNED to Finance and Labor Committee
Heard in Committee. Speakers: Harvey Rose, Budget Analyst: Alice Vdlagomez, Deputy Director, Employee
Relations Division, Department of Human Resources.
RECOMMENDED by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
010046 [Memorandum of Understanding Amendment No. 1 - Plumbers. Local 38|
Ordinance implementing Amendment No. 1 to the 1997-2001 Memorandum of Understanding between the
United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry, Local No. 38
and the City and County of San Francisco reconfirming the agency shop provision thereof effective July 1,
2000. (Human Resources Department)
1/5/01 , RECEIVED AND ASSIGNED to Finance and Labor Committee
Heard in Committee. Speakers: Haney Rose, Budget Analyst; Alice Vdlagomez, Deputy Director, Employee
Relations Division, Department of Human Resources.
RECOMMENDED by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
City and County of San Francisco
Printed at 5:1.1 P\t on .? .? fU
Finance and Labor Committee Meeting Minutes January 24, 2001
010021 [November 2000 Branch Library Bond Program]
Supervisor Yee
Hearing to determine and ensure that the voters' intent in approving the November 2000 Branch Library Bond
Program is honored by the San Francisco Public Library and the San Francisco Library Commission; and to
receive information from the San Francisco Public Library about where they intend to get the funds to
implement both the first and second phases of improvements to the Main Library.
1 /2/01 , RECEIVED AND ASSIGNED to Finance and Labor Committee.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Susan Hildreth, Acting City Librarian;
Edward Harrington, Controller; Chris Ortiz, Member, Council of Neighborhood Libraries; Sue Cauthen,
Member, Council of Neighborhood Libraries; Peter Warfield; Chuck Forrester, Executive Director, Friends
and Foundation of Library; Deborah Doyle, Member of Board, Friends and Foundation of Library and
Council of Neighborhood Libraries; Ellen Hubert, Member of Board, Friends and Foundation of Library;
Theodore Lakey, Deputy City Attorney.
CONTINUED TO CALL OF THE CHAIR by the following vote:
Ayes: 3 - Yee, Ammiano, Leno
ADJOURNMENT
The meeting adjourned at 11:01 a.m.
City and County of San Francisco 3 flimted at 5:1 J PM on < w'J
[Budget Analyst Report]
Susan Horn
Main Library-Govt. Doc. Section
DOCUMENTS DEPT
CITY AND COUNTY '^^MMIir^' 0F SAN FRANCISCO
3
JAN 2 3 2001
BOARD OF SUPERVISORS SAN FRANCISCO
PUBLIC LIBRARY
BUDGET ANALYST
1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642
FAX (415) 252-0461
January 18, 2001
TO: 'Finance and Labor Committee
FROM: , Budget Analyst
SUBJECT: January 24, 2001 Finance and Labor Committee Meeting
Items 1. 2. 3. 4. 5 and 6 - Files 01-0041. 01-0042. 01-0043. 01-0044. 01-0045
and 01-0046
Department: Department of Human Resources (DHR)
Items: File 01-0041: Ordinance implementing Amendment
No. 3 to the FY 1997-2001 four year Memorandum
of Understanding between the International
Brotherhood of Electrical Workers, Local 6 and the
City and County of San Francisco reconfirming the
Agency Shop provision thereof effective July 1,
2000.
File 01-0042: Ordinance implementing Amendment
No. 3 to the FY 1997-2001 four year Memorandum
of Understanding between the Glaziers,
Architectural Metal and Glass Workers, Local
Union 718 and the City and County of San
Francisco reconfirming the Agency Shop provision
thereof effective July 1, 2000.
File 01-0043: Ordinance implementing Amendment
No. 4 to the FY 1997-2001 four year Memorandum
of Understanding between the Laborers
International Union, Local 261 and the City and
Memo to Finance and Labor Committee
January 24, 2001 Finance and Labor Committee Meeting
County of San Francisco reconfirming the Agency
Shop provision thereof effective July 1, 2000.
File 01-0044: Ordinance implementing Amendment
No. 3 to the FY 1997-2001 four year Memorandum
of Understanding between the Machinist Union,
Local 1414, International Association of Machinists
and Aerospace Workers Machinists Automotive
Trades District Lodge 190 and the City and County
of San Francisco reconfirming the Agency Shop
provision thereof effective July 1, 2000.
File 01-0045: Ordinance implementing Amendment
No. 2 to the FY 1997-2001 four year Memorandum
of Understanding between the Pile Drivers, Divers,
Carpenters, Bridge Wharf and Dock Builders, Local
Union No. 34 and the City and County of San
Francisco reconfirming the Agency Shop provision
thereof effective July 1, 2000.
File 01-0046: Ordinance implementing Amendment
No. 1 to the FY 1997-2001 four year Memorandum
of Understanding between the United Association
of Journeymen and Apprentices of the Plumbing
and Pipe Fitting Industry, Local No. 38 and the
City and County of San Francisco reconfirming the
Agency Shop provision thereof effective July 1,
2000.
Description: The proposed ordinances would amend
(Amendments 1, 2, 3 or 4 depending on the union,
see above) six existing FY 1997-98 through FY
2000-01 four-year Memoranda of Understanding
(MOUs), retroactive for the one year period from
July 1, 2000 through June 30, 2001 to reaffirm the
Agency Shop provisions, that are currently
included in the existing MOUs, with the following
six unions:
1. International Brotherhood of Electrical
Workers, Local 6;
2. Glaziers, Architectural Metal and Glass
Workers, Local 718;
3. Laborers International Union, Local 261;
BOARD OF SUPERVISORS
BUDGET ANALYST
2
Memo to Finance and Labor Committee
January 24, 2001 Finance and Labor Committee Meeting
4. Machinist Union, Local 1414, which includes
the International Association of Machinists and
Aerospace Workers Machinists Automotive
Trades District Lodge 190
5. Pile Drivers, Divers, Carpenters, Bridge, Wharf
and Dock Builders, Local 34; and
6. United Association of Journeymen and
Apprentices of the Plumbing and Pipe Fitting
Industry, Local 38.
In accordance with the State Meyers-Millias-Brown
Act, California Government Code Sections 3500-
3510, an Agency Shop means an arrangement that
requires an employee, as a condition of continued
employment, either to join the recognized employee
organization (union), or to pay the employee
organization a service fee in an amount not to
exceed the employee organization's standard
initiation fee, periodic dues, and general
assessments of such employee organization for the
duration of the bargaining agreement (or
Memorandum of Understanding), or a period of
three years from the effective date of such
agreement, whichever period is less.
According to Ms. Alice Villagomez of the
Department of Human Resources (DHR), although
union membership in an employee organization
having MOUs with the City and County of San
Francisco is voluntary, if an employee chooses not
to join a union, and that union has included an
agency shop provision in their MOU, then that
employee can be charged the agency shop fees by
the employee organization that represents that
employee's classification. The proposed six
ordinances address the agency shop provisions for
those City employees that are represented but do
not voluntarily join one of the subject six unions.
Ms. Villagomez advises that the agency shop fees
are typically less than the total union membership
fees charged to employees that choose to join the
union because the agency shop fees can only
include the costs for representation and cannot
include the union's expenses for other non-
representation activities, such as political
BOARD OF SUPERVISORS
BUDGET ANALYST
3
Memo to Finance and Labor Committee
January 24, 2001 Finance and Labor Committee Meeting
activities. Ms. Mary Hao advises that most, but not
all of the City's MOUs contain agency shop fee
provisions, and that State law prohibits
supervisory, confidential or managerial employees
from being subject to agency shop provisions.
The Attachment, provided by DHR, identifies (1)
the number of employees that would be affected by
the subject ordinances and (2) the amounts such
employees pay on a biweekly basis to join each of
the subject unions and (3) the amounts such
employees pay on a biweekly basis if they do not
join each union and instead are assessed the
agency shop fees for each of the six MOUs. As
shown on the Attachment, individual employees
are charged agency shop fees, ranging from $15 to
$35.78 per biweekly pay period, or a total of
approximately $390 to $930 per year.
The Attachment contains variations in the amount
of fees paid by employees in three of the subject
unions (i.e., Plumbers Local 38, Laborers Local 261
and Electricians Local 6) because of internal
variations in each of the union's formulas for
assessing dues and agency shop fees. DHR advises
that the number of employees indicated on the
Attachment for each union do not include the
supervisory, confidential or management
employees within each union, because, as noted
above, supervisory, confidential and management
employees are not required to join an employee
organization and the agency shop provisions are
not enforceable for such positions.
Comments: 1. According to Ms. Villagomez, the six subject
MOUs currently contain identical language to the
language that is now being proposed regarding the
Agency Shop provisions. These new amendments
are being proposed because, as noted above, in
accordance with the Meyers-Mil 1 i as-Brown Act,
State Government Code Sections 3500-3510, the
Agency Shop provisions can only be in effect for a
maximum of three years. The existing six MOUs
extend for a four-year period, from July 1, 1997
through June 30, 2001. Therefore, after the third
BOARD OF SUPERVISORS
BUDGET ANALYST
4
Memo to Finance and Labor Committee
January 24, 2001 Finance and Labor Committee Meeting
year of the existing MOUs, which ended on June
30, 2000, these Agency Shop provisions were no
longer in effect.
All of the subject ordinances would therefore
amend the existing six MOUs, and reaffirm the
same Agency Shop provisions as existed between
FY 1997-98 through FY 1999-2000 to now become
effective for FY 2000-01. All of the proposed
amendments, for the existing six unions would be
effective for the one year period, retroactive from
July 1, 2000 through June 30, 2001, to meet the
State's three-year limitation requirement.
2. According to Ms. Hao, these amendments are
only now being brought before the Board of
Supervisors for approval, almost seven months
after their effective date of July 1, 2000, because
the City Attorney's Office recently made DHR
aware of the State's three-year limitation on the
Agency Shop provisions.
3. Ms. Hao advises that the State's three-year
limitation for Agency Shop provisions in the
Meyers-Millias-Brown Act, was recently amended
by the State Legislature, such that effective
January 1, 2001, there are no limitations on the
length of time such Agency Shop provisions are
effective in multi-year MOUs.
4. Given that the proposed amendments would
simply reaffirm existing Agency Shop provisions,
the proposed ordinances would not have any fiscal
impact on the City. However, as shown on the
Attachment, individual employees would be
charged agency shop fees, ranging from $15 to
$35.78 per biweekly pay period, or a total of
approximately $390 to $930 per year.
These Agency Shop fees are deducted by the
Controller's Office, from the individual employees
paychecks on a biweekly basis. Ms. Pamela Levin
of the Controller's Office confirms that the proposed
ordinances would not result in any incremental
costs to the City. Ms. Levin also advises that the
BOARD OF SUPERVISORS
BUDGET ANALYST
5
Memo to Finance and Labor Committee
January 24, 2001 Finance and Labor Committee Meeting
Controller's Office charges a payroll deduction fee
which is deducted from the Agency Shop fees
transmitted to the employee organization to offset
the Controller's cost of processing such deductions.
5. In accordance with the Agency Shop provisions,
the City is required to provide each newly hired
employee with information regarding each union
and the agency shop provisions specified in their
MOU. In addition, the Controller is required to
provide (1) a list to the union of all employees that
are members of the union and (2) a list to the union
of all employees that pay the agency shop fees,
identifying the employee's name, employee
classification number, department number and the
amount deducted.
6. In accordance with the Agency Shop provisions,
the union is required to annually provide an
explanation of the union's agency shop fees and
sufficient financial information to employees to
enable the employees who must pay service fees to
gauge the appropriateness of the fees. In addition,
the union must provide a reasonably prompt
opportunity to the employees who they represent
to challenge the amount of the agency shop fees
before an impartial decision maker chosen by a
nationally recognized arbitration agency, and the
union is required to establish an escrow account to
hold amounts reasonably in dispute while such
challenges are pending. Each union also agrees to
indemnify and hold the City harmless for any
losses or damages arising from these provisions.
7. As indicated above, most, but not all of the City's
MOUs contain agency shop fee provisions. Further,
State law prohibits supervisory, confidential or
managerial employees from being subject to agency
shop fee provisions. Therefore, the Budget Analyst
considers approval of the subject ordinances, which
do not affect all City employees, to be policy
matters for the Board of Supervisors.
Recommendation: Approval of the proposed ordinances are policy
matters for the Board of Supervisors.
BOARD OF SUPERVISORS
BUDGET ANALYST
6
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Memo to Finance and Labor Committee
January 24, 2001 Finance and Labor Committee Meeting
Item 7 - File 01-0021
Department:
Item:
Description:
Public Library
Hearing to determine and ensure that the voters' intent
in approving the November 2000 Proposition A, Branch
Library Facilities Improvement Bond Program is honored
by the San Francisco Public Library and the San
Francisco Library Commission; and to receive information
from the San Francisco Public Library about where they
intend to get the funds to implement both the first and
second phases of improvements to the Main Library.
The Proposition A, Branch Library Facilities
Improvement Bond, approved by the San Francisco voters
in November of 2000, authorized $105,865,000 in General
Obligation Bond monies for the acquisition,
rehabilitation, renovation, improvement, construction and
reconstruction of certain improvements and renovations
to 24 Branch Libraries and to the Public Library's
System-Wide Support Center/Brooks Hall (see
Attachment I, provided by the Public Library for a list of
the 24 Branch Libraries and the System-Wide Support
Center/Brooks Hall), according to Mr. George Nichols
from the Library.
On June 19, 2000, the Board of Supervisors approved a
resolution to submit to the San Francisco voters on
November 7, 2000, a proposition to incur bonded
indebtedness of the City and County, in the principal
amount of $129,425,000 for the acquisition, construction
and reconstruction of certain improvements to Public
Library Branch Facilities (File 00-1058). On June 29,
2000, a second resolution was submitted to the Board of
Supervisors as a substitute for the resolution approved by
the Board of Supervisors on June 19, 2000. However, the
amount of the Library's proposed bonded indebtedness
was reduced to $105,865,000, a reduction of $23,560,000
(File 00-1147) in this second resolution. According to Mr.
Nichols, the reduction in the Branch Library Facilities
Improvement Bond amount was due to recommendations
by the City's Capital Improvement Advisory Committee
(CIAC) for (a) the elimination of site acquisition costs for
the proposed new Branch Library located in Mission Bay,
BOARD OF SUPERVISORS
BUDGET ANALYST
8
Memo to Finance and Labor Committee
January 24, 2001 Finance and Labor Committee Meeting
(b) a reduction in costs for the proposed System-Wide
Support Center/Brooks Hall renovation, (c) the
availability of State Proposition 141 funding, and (d) the
availability of $2,400,000 from the Earthquake Safety
Program II fund. Mr. Nichols advises that the Mission
Bay Branch Library site acquisition costs were eliminated
because the Public Library is working with the
Redevelopment Agency to house the Mission Bay Branch
Library with a neighborhood Senior Citizen Center to be
located in Mission Bay. Mr. Nichols states that the
System-Wide Support Center/Brooks Hall renovation
costs were reduced because alternatives to the renovation
of Brooks Hall and the construction of a new System-Wide
Support Center as separate projects were reviewed, and
found to be more cost effective by the CIAC.
Mr. Nichols advises that even though the bond amount
was reduced, the bond resolution language remained the
same. Such language specifically prohibited the Public
Library from using any of the Proposition A, Branch
Library Facilities Improvement Bond monies on
improvements to the Main Library. On November 7,
2000, 74.38 percent of San Francisco voters approved
Proposition A, the Branch Library Improvement Bond for
$105,865,000.
Although the subject hearing references phase one and
two of improvements to the Main Library, Mr. Nichols
states that there are no stipulated phases for the
improvements to the Main Library.
According to Mr. Nichols, an independent Post Occupancy
Evaluation (POE) Final Report on the Main Library
prepared by a consultant team consisting of an architect
and two library consultants, was issued in January of
2000, outlining suggestions for improvements to the Main
Library facilities totaling approximately $28,000,000 as
detailed in the San Francisco Public Library POE. Such
funds would be subject to appropriation approval of the
Mayor and the Board of Supervisors. Since the issuance
of the Final POE, the Library has been examining the
1 Proposition 14, approved by the voters in March of 2000, provides $350 million of State-wide funds for library
construction projects, which is available on a competitive basis, and requires a 35 percent local match.
BOARD OF SUPERVISORS
BUDGET ANALYST
9
Memo to Finance and Labor Committee
January 24, 2001 Finance and Labor Committee Meeting
POE recommendations to determine what
recommendations are necessary to improve the building
and, therefore, the efficiency of the Main Library. At the
January 2, 2001 Library Commission Meeting, the
Library presented the Commission with the Library
staffs prioritized list of desired improvements for the
Main Library which totaled approximately $5,272,500
(see Attachment II provided by the Public Library). Mr.
Nichols advises that the Library Commission did not
approve moving ahead with any projects on the list at
that time. Mr. Nichols further advises that any projects
for the Main Library approved by the Library Commission
would also have to be approved by the Mayor and the
Board of Supervisors and would be funded by fund
balances remaining in the original 1988 $109,527,000
Library Improvement Bond, which currently total
approximately $4,300,000.2 In addition, Mr. Nichols
advises that approval by the Mayor and the Board of
Supervisors would be required to use unappropriated
fund balances from the Proposition E, Library
Preservation Fund to fund Main Library improvements.
The Library is projecting a Library Preservation Fund
fund balance of approximately $2,500,000 to $3,000,000 at
the end of the FY 2000-2001. According to Mr. Nichols
the Library would not use the November 2000 Proposition
A, Branch Library Facilities Improvement Bond monies
for any capital improvements to the Main Library. The
balance in the 1988 Library Improvement Bond
($4,300,000) and the estimate balance in the Library
Preservation Fund ($2,500,000 to $3,000,000) would be
more than enough to fund the Public Library
improvements of $5,272,500 for the improvements to the
Main Library and are subject to appropriation approval of
the Mayor and the Board of Supervisors.
Mr. Nichols further advises that at its January 18, 2001
meeting, the Library Commission will consider approval
of a $1,549,886 supplemental appropriation for renovation
and repairs to the Main Library in FY 2000-2001. The
Attachment III, provided by the Public Library, highlights
2 Mr. Nichols advises that of the original $109.5 million 1988 Library Improvement Bond, S102.5 million was
expended on the Main Library, and $4,831,284 was expended on the Branch Libraries, including $359,641 for the
Mission Branch, $1,826,506 for the Chinatown Branch, $1,005,066 for the Sunset Branch, $999,071 for the Park
Branch and $641,000 for the Presidio Branch.
BOARD OF SUPERVISORS
BUDGET ANALYST
10
Memo to Finance and Labor Committee
January 24, 2001 Finance and Labor Committee Meeting
the proposed projects totaling an estimated $1,549,886.
Mr. Nichols advises that based on the Controller's
anticipated six-month revenue projections3, the Library
proposes to spend $250,000 from unappropriated
Proposition E Library Preservation Funds, $586,000 from
unappropriated General Fund revenue mandated by
Proposition E for Library use and $713,886 from the 1988
Library Improvement Bond for a total of $1,549,886 to
support the proposed projects highlighted in Attachment
III for the Main Library. Although, the proposed
$1,549,886 of projects were recommended by the POE,
these projects are not part of the approximately
$5,272,500 package the Public Library staff discussed
with the Library Commission on January 2, 2001, except
for a $50,000 request for a signage consultant. Mr.
Nichols advises that the proposed projects totaling
$1,549,886, are, for the most part, projects recommended
in the POE that can be completed independent of other
modifications to the Main Library that will be more
complicated to execute.
According to Mr. Nichols, the Public Library is currently
planning the implementation of the Proposition A, Branch
Library Facilities Improvement Bond Program, which
may include the creation of a 2000 Proposition A, Branch
Library Facilities Improvement Bond Oversight
Committee. Members may include individuals from the
Library Commission, the Council of Neighborhood
Libraries, the Friends and Foundation of the San
Francisco Public Library, the Board of Supervisors, the
Mayor's Office and interested community members. One
aspect of the Proposition A, Branch Library Facilities
Improvement Bond Oversight Committee's role could be
to ensure that the Proposition A, Branch Library
Facilities Improvement Bond monies totaling
$105,865,000 are spent as specified in the legislation the
voters approved on November 7, 2000, according to Mr.
Nichols.
Recommendation: Request the Public Library to instruct its 2000
Proposition A, Branch Library Facilities Improvement
3 As of the writing of this report, according to Mr. Joe Matranga of the Controller's Office, the preliminary six-
month projections appear to be accurate.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance and Labor Committee
January 24, 2001 Finance and Labor Committee Meeting
Supervisor Yee
President Ammiano
Supervisor Leno
Supervisor Peskin
Supervisor Gonzalez
Clerk of the Board
Controller
Steve Kawa
Bond Oversight Committee to issue reports to the Finance
and Labor Committee on a semi-annual basis which detail
all expenditures from the bond funds by facility and by
individual projects.
BOARD OF SUPERVISORS
BUDGET ANALYST
12
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13
fvccacnment 11
San Francisco Public Library
Memorandum lOO Larkin Street, San Francisco, CA 94102
To: Library Commissioners
From: Susan Hildreth, Acting City Librarian J ft
Re: Post Occupancy Evaluation Recommendations
Date: January 2, 2001
At the suggestion of President Higueras, staff has prepared for your review a detailed
analysis of the recommendations that were included in the Post Occupancy Evaluation of
the Main Library. We have addressed the nineteen major recommendations included in
the report, including staff response, timeline and estimated costs for each
recommendation. The report also contained specific recommendations regarding audio-
visual systems which we are addressing but have not included in this document.
In an attempt to summarize information contained in the report, I would like to highlight
the following priorities identified by staff.
Projects with most benefit to public and staff Total Cost - $5,272,500
1 . Development of new master signage system to be completed by Fall 2001 .
Estimated cost - $350,000
2. Improvements to First Floor, Borrowers' Services area — A staff task force led by
Ned Himmel is developing recommendations for this area, to be completed by
June 2001.
Estimated cost - $1,822,500
3. Expansion of First Floor for public services - Dependant on relocation of
Technical Services; determination of new location to be made by Fall 2001.
Estimated cost -$1,890,000. Does not include cost of relocation of
Technical Services.
4. Improvements to First Floor restrooms - Dependant on relocation of
Technical Services.
Estimated cost - $400,000
5. Improvements to Second Floor - To be developed by January 2002.
Estimated cost - $810,000
Modifications to the Third Floor, including reconfiguring service desks and increasing
public space, will also be reviewed by staff. Estimated costs are $2,600,000.
Staff recommends that the Library Improvement Fund, with a balance of about
$4,000,000, be used to support these modifications as they are developed. The Library
Improvement Fund contains accrued interest and funds remaining from the bond for
the construction of the Main Library. Staff is preparing a supplemental budget request
including recommended building fixes that are not included in the above information that
is planned for consideration on the 1/18/01 agenda.
14
Attachment I
Page 1 ot 4
GROUP 1 PROJECTS
Project Project Description/Justification Est. Cost
1 . Loading Dock
The loading dock services the Main Library as well as
Brooks Hall. The existing dock and lift cannot accommodate
the variety of delivery vehicles that use the dock. This
results in potentially hazardous conditions as loads must be
manually off-loaded from trucks and lifted onto the dock.
This project involves the purchase and installation of a
mechanical lift that can handle the various delivery vehicles.
$34,500
2. Seismic Joint
The seismic joint requires modification, redesign, and/or
repair due to inadequate sealing. The Library experiences
water intrusion around the entire Main Library perimeter
footprint and at the curtain wall pre -cast joints during
inclement weather and paving wash down activities. The
project involves installation of new flashing to redirect
water, or installation of a gutter system to catch water. The
Library has replaced damaged mildewing gypsum board
several times because of water intrusion, and
will continue to do so until a permanent fix is designed and
installed.
109,750
3. Fire Doors
This is a fire, life, safety issue. Fire doors located near the
Grove Street entrance and in the gallery on the lower level
are manually operated. These are two extremely heavy fire
doors that have been taken off-line from the fire/life safety
system because they currently close too swiftly, have
damaged interior surfaces and could injure staff and patrons.
This funding will allow the doors to be closed by motors
rather than counterweights. The project involves purchase
and installation of motors and control panels to operate the
fire doors.
40,480
4. Public Address System
The existing public address (PA) system is inadequate and
needs upgrading. It does not cover non-public work areas on
all floors including the lower level of the Main and Brooks
Hall. This places staff working in those areas at risk in the
event of an emergency. The project involves upgrading the
PA system and extending the system into non-public work
areas in the Main and in Brooks Hall.
95,000
5. Audio-Visual Systems
The POE found deficiencies with the existing AV systems in
the Koret and other public meeting rooms. The use of the
Koret and other public meeting rooms in the Library has
exceeded initial expectations and capacity of the Library.
These rooms have become a significant resource for
community group meetings, City Agency meetings, private
events, and varied public programming. The existing AV
system does not adequately meet the diversity of
programming that now occurs. This project involves the
purchase and installation of AV equipment capable of
handling the diversity of programming that occurs at the
Library. Equipment purchase and installation will be done in
accordance with recommendations of an A/V design
57,000
15
fage 2 ot 4
consultant.
6. Elevators
Elevator #7 serves the lower level, 1st and 2nd floors. It's
motor often overheats during heavy use. This project would
fund an oil cooler to prevent this problem from occurring. It
would also fund refinishing of the all elevator interiors to a
brushed finish to reduce vandalism and the cost of annual
refinishing. Existing public elevator doors and cabs are
covered with a mirror-like metal finish. Although attractive
they are difficult and costly to maintain. The doors and cabs
are subject to damage from normal use as well as from
graffiti scratched or etched into the panels. The project
involves refinishing the door and cab surfaces, converting
them from their current highly reflective and mirror-like
finish to a burnished scratch resistant surface.
49,433
7. Hyde Street Door
This project involves reconfiguring the staff entry on Hyde
Street. The existing door is set-back from the sidewalk
creating a small alcove. During hours the Library is closed,
the alcove is used as a urinal by people on the streets. This
significantly increases maintenance of the area and is a major
health concern for staff entering and leaving the building
through this door. The project involves purchase and
installation of a rolling gate that will cover the alcove during
the hours the Library is closed and setting the existing doors
back to accommodate the rolling gate.
17,180
8. Exterior Granite and
Lighting Repairs
Various granite pavers surrounding the building are broken
and need to be replaced. Bollard lighting fixtures will
provide needed evening illumination of the ramps and
walkways on the Fulton and Larkin sides of the building.
64,600
9. Misc. Wall Repairs
Several of the walls and columns with encaustic finishes
have been damaged and need to be restored. Patrons using
reader chairs near the north and west windows on floors 3, 4
and 5 are constantly damaging the sheet rock since there is
not much extra space between the back of the chair and the
wall. Project involves repair of sheet rock and Installation of
chair railings to prevent future damage.
11,600
10. 6th Floor Public
Storage/Locker
Replacement
Existing lockers on the 6th floor would be replaced with a
recessed display case that would include a tackable back
surface and adjustable shelves. The lockers are virtually
unused and the display case would enhance exhibits that are
staged on the 6th floor. The project involves design,
construction, and installation of the display case.
6,042
11. Grove Street Entrance
Display Case
This project involves the installation of display cases in the
Grove Street entryway. Display cases will replace benches
that are currently there. Grove Street is a major entry point
into the building and the display cases would provide a
convenient and effective source of information regarding
programs, exhibits, and public service announcements.
14,850
SUBTOTAL
CONSTRUCTION
5500,435
Design Contingency
10%
50,044
General Conditions
10%
50,044
Contractor's Overhead and
15%
90,078
16
Attachment I J
Page 3 of A
Profit
TOTAL EST.
CONSTRUCTION BED
$690,601
Construction Contingency
103,590
TOTAL
CONSTRUCTION
$794,191
Project Management,
design, consultants,
construction documents,
permits, and management
35%
277,967
TOTAL PROJECT
COST
$1,072,158
GROUP 2 PROJECTS
1 . Replace damaged table
tops
Tabletops in the public areas are heavily used and have been
damaged through normal use and through deliberate acts of
vandalism. Existing tabletops are constructed of wood.
Although attractive they are difficult to maintain and
unsightly when damaged. This project involves installing
plastic laminate over existing wood tops for 60 tables.
Laminate surfaces are easier to maintain and easier to repair
when damaged. Project will be completed by the Bureau of
Building Repair (BBR)/DP W.
S30.000
2. Door Stop Fabrication
and Installation
Many of the doorstops used at glass doors are broken. A
new type of doorstop has been tested by DPW and the
Library that has proven to be effective in stopping these
heavy glass doors from hitting walls/furniture. Project will
be completed with the assistance of the Bureau of Building
Repair/DP W. All glass door locations will be equipped with
these doorstops.
6,825
3. Signage Consultant
A major finding of the POE was the inadequacy of signage
in the Library. The report found that inadequate signage
reduces operational efficiency by creating an over-reliance
on staff by the public for basic directions and poses a barrier
to the public's access to materials and services. The POE
specifically noted that signage is not visible in the line of
travel, stack signage is deficient, and that directional signs
are not clear. The POE recommended that a signage
consultant with a background in way-finding design for
public facilities like the library be hired to develop a signage
system that will mitigate existing problems and after the
initial signs are done, can be replicated at a low-cost. This
project provides funds to develop an RFP for consulting
services and funds to pay for the consultant once selected.
50,000
4. Audio/Visual Systems
Design
Project involves hiring an A/V consultant to assess and
design an appropriate system.
20,000
5. Radio Repeater
System
This is a fire, life, safety issue. There are numerous "dead"
areas in the building where radio signals and communication
cannot take place. Radio signals cannot be picked up in
Brooks Hall. Because of these "dead" areas, Library
230,000
17
Attachment III
Page 4 of 4
personnel, private contractors, and emergency personnel
working in these areas cannot communicate via radio and
this places them at risk in emergency situations. The
portable radio repeater system will allow for radio
transmission in all areas of the main library and in Brooks
Hall. Transmitting devices will be wired and installed which
will provide needed radio signaling necessary for normal
operations and for emergencies. The Library will work with
DTIS to complete this project.
TOTAL, OTHER
PROJECTS
S336,825
PROJECT RESERVE
$140,903
TOTAL COSTS
$1,549,886
SOURCES
Library Preservation Fund (Proposition E)
General Fund (Proposition E Mandated Contribution)
Library Improvement Fund
$250,000
$586,000
$713,886
18
City and County of San Francisco City Ha"
J J 1 Dr. Carlton B.
Meeting Minutes Goodiett Place
San Francisco, CA
Finance and Labor Committee 94102-4689
t>Tfo^
Wednesday, January 31, 2001 10:00 AM City Hall, Room 263
Regular Meeting
Members Present: Mark Leno, Aaron Peskin, Matt Gonzalez.
MEETING CONVENED
The meeting convened at 10:04 a.m.
002145 [S. F. International Airport Advertising Program Lease]
Resolution approving San Francisco International Airport Advertising Program Lease between Transportation
Media, Inc. (a division of Eller Media) and the City and County of San Francisco, acting by and through its
Airport Commission. (Airport Commission)
12/6/00, RECEIVED AND ASSIGNED to Finance and Labor Committee.
1/17/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Cathy Widener, Governmental Affairs
Administrator, Airport
Continued to January 31, 2001.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst: Cathy Weidner, Government Affairs
Administrator, Airport: Theodore Lakey, Deputy City Attorney; Theresa Rivor, Concessions Development
Manager, Airport.
Amended at the end of line 5 by adding "requiring notice to the Finance Committee of any proposed
advertising program expansion. " Further amended by adding the following: "FURTHER RESOLVED. That
the Airport Director shall communicate with the Finance Committee before implementing any proposal to
expand the advertising program approved by this resolution. " New title.
AMENDED.
Resolution approving San Francisco International Airport Advertising Program Lease between Transportation
Media, Inc. (a division of Eller Media) and the City and County of San Francisco, acting by and through its
Airport Commission; requiring notice to the Finance Committee of any proposed advertising program
expansion. (Airport Commission)
RECOMMENDED AS AMENDED by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
City and County of San Francisco I Printed at StH PH on SOW
Finance and Labor Committee Meeting Minutes January 31, 2001
002187 [Contract between the Dept. of Public Health and Health Advocates, LLP to provide uncompensated
care recovery services]
Resolution authorizing the Director of Public Health and the Purchaser to execute a contract between the City
and County of San Francisco and Health Advocates, LLP to provide uncompensated care recovery services.
(Public Health Department)
12/13/00, RECEIVED AND ASSIGNED lo Public Health and Environment Committee
12/28/00, TRANSFERRED to Finance and Labor Committee. At the request of the President, this matter is to be scheduled for the
January 10,2001 meeting.
1/17/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose. Budget Analyst, Monique Zmuda, Chief Financial Officer,
Department of Public Health. Steve Reid, President. Paralign, Diane Sovereign (attorney), Linda Safir. Director of Sales, Parahgn. Karla
Fine, Manager, Paralign; Fanny Mayorga, Paralign; Juan Sosa, Paralign. Helen Lim, Paralign; Robert McCarthy (registered to speak for
Paralign), Al Leibovic, Health Advocates, Theodore Lakey, Deputy City Attorney, Edward Hamngton, Controller.
Continued to January 3 1 , 200 1 .
Heard in Committee. Speakers: Haney Rose. Budget Analyst; Monique Zmuda, Chief Financial Officer,
Department of Public Health.
Continued to February 7. 2001.
CONTINUED by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
010053 [Lease of property at 1421 Broderick Street for Department of Public Health to operate a residential
care facility for persons who need 24-hour care and supervision!
Resolution authorizing and approving the lease by and between the City and County of San Francisco, for the
Department of Public Health, as tenant, and Seto Family Trust, as landlord, for the property located at 1421
Broderick Street. (Real Estate Department)
1/10/01, RECEIVED AND ASSIGNED to Finance and Labor Committee
Heard in Committee. Speakers: Han'ey Rose, Budget Analyst; Marc Trot:, Department of Public Health;
Monique Zmuda. Chief Financial Officer. Department of Public Health; Anthony Delucchi. Director of
Property, Real Estate Department; Richard Robinson, Community Organizer. Community Outreach Program.
Amended on page 2, line 5. by replacing "SO. 67" with "SO. 81. "
AMENDED.
RECOMMENDED AS AMENDED by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
010104 [Settlement of Grievance. Local 21 [
Resolution authorizing settlement of the grievance filed by Glen Alston and the International Federation of
Professional and Technical Engineers. Local 21. AFL-CIO ("Local 21"). on behalf of 16 Civilian Fire
Inspectors pursuant to the Memoranda of LTnderstanding between Local 21 and the City and County of San
Francisco in the aggregate amount of $80,080.48. (Human Resources Department)
1/17/01, RECEIVED AND ASSIGNED to Finance and Labor Committee.
Heard in Committee. Speakers: Han'ey Rose, Budget Analyst. Alice I'illagomez. Deputy Director. Employee
Relations Division, Department of Human Resources; Chief Gary Massetani. Bureau of Fire Inspection, Fire
Department; Martin Gran, Deputy City Attorney; Glenn Alston.
Amended on lines 8 and 13. by replacing "$80,080.48" with "S81.625.52. " New title.
AMENDED.
City and County of San Francisco 2 Printed at ?:I5 PM on J 3 M
Finance and Labor Committee Meeting Minutes January 31, 2001
Resolution authorizing settlement of the grievance filed by Glenn Alston and the International Federation of
Professional and Technical Engineers, Local 21, AFL-CIO ("Local 21"), on behalf of 16 Civilian Fire
Inspectors pursuant to the Memoranda of Understanding between Local 21 and the City and County of San
Francisco in the aggregate amount of $81,625.52. (Human Resources Department)
RECOMMENDED AS AMENDED by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
ADJOURNMENT
The meeting adjourned at 11:33 a.m.
City and County of San Francisco 3 ''"""■ J * *'* Mi on J 3 M
[Budget Analyst Report]
Susan Horn
Main Library-Govt. Doc. Section
3
hi /a
DOCUMENTS DEPT.
OF SAN FRANCISCO ,*». , ?nm
SAN FRANCISCO
^BOARD OF SUPERVISORS PUBLIC LIBRARY
BUDGET ANALYST
1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642
FAX (415) 252-0461
January 25, 2001
TO: <: Finance and Labor Committee
FROM: 'Budget Analyst
SUBJECT: January 31, 2001 Finance and Labor Committee Meeting
Item 1 - File 00-2145
Note: This item was continued by the Finance Committee at its meeting of
January 17, 2001.
Department:
Item:
Lessor:
Lessee:
Airport
Resolution approving a new Advertising Program Lease
between Transportation Media, Inc. and the City and
County of San Francisco, acting by and through its
Airport Commission.
City and County of San Francisco, acting by and through
its Airport Commission
Transportation Media, Inc., a division of Eller Media
Company, Inc., an Illinois-based company.
Locations Being
Leased:
According to Mr. Bob Rhoades of the Airport, there are
144 locations for the proposed advertising, divided into
two categories:
• Wall-mounted advertising spaces in the Airport's
parking structures, transit stations, shuttle bus
Memo to Finance and Labor Committee
January 31, 2001 Finance and Labor Committee Meeting
interiors, non-terminal bus shelters, the rental car
center, and parking area connector tunnels.
• Silent monitors in the International Terminal's
boarding areas. Silent monitors are 27 inch high-tech
screens.
None of the proposed 144 advertising locations would be
in the Airport's North Terminal, South Terminal, or
former International Terminal.
Revenue Generated:
Term of Lease:
Right of Renewal:
Description:
Under this proposed lease, Transportation Media, Inc. is
required to pay the Airport a first year Minimum Annual
Guarantee of $4,050,000 or 70 percent of gross revenues,
whichever is higher. The proposed lease states that the
Minimum Annual Guarantee shall be increased annually
by the amount of the Consumer Price Index's annual
increase (adjusted for any decrease in the annual number
of enplanements). If further advertising sites are added
to the lease, then the Minimum Annual Guarantee would
be increased on a pro rata basis, as determined by the
Airport.
Five years from the earlier of (a) the date on which any
advertising is installed, or (b) February 1, 2001.
Three one-year options exercisable at the Airport
Commission's sole option. Mr. Rhoades states that there
is no right of renewal beyond the maximum term of eight
years and that any future lease would be subject to a
Request for Proposal (RFP).
According to Mr. Rhoades, the Advertising Program Lease
represents a new source of revenue for the Airport. Mr.
Rhoades advises that the Airport Commission has had a
policy banning advertising inside the Airport's terminals
since the 1980s. This policy was amended in early 2000
when the Airport Commission decided to permit (a)
advertising panels in certain limited areas within the
Airport's parking structures, transit stations, shuttle bus
interiors, non-terminal bus shelters, the rental car center,
and parking area connector tunnels, and (b) silent
monitors in the International Terminal's boarding areas.
The advertising display equipment would be subject to
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance and Labor Committee
January 31, 2001 Finance and Labor Committee Meeting
approval by tbe Airport's Design and Review Committee1,
while other Airport staff would be responsible for
reviewing the advertisements' content. The proposed
lease prohibits advertisements which violate the Airport
Advertising Standards Policy, including those which (a)
advertise alcohol or tobacco products, (b) espouse political
or religious views, (c) promote any illegal activity,
gambling, or services in direct competition with the
Airport's business objectives, or (d) contain offensive
imagery or language. Transportation Media, Inc. would
coordinate all of the advertisers.
Comments: The Airport's Proposed Lease with Transportation
Media. Inc.
1. The RFP for the proposed lease was issued by the
Airport in July of 2000 and firms were required to submit
proposals with a Minimum Annual Guarantee of
$2,000,000 or more. According to Mr. Patrick Quinn of
the Airport, the Airport notified approximately 25 firms of
an informational conference which was held on June 28,
2000. Seven of the firms which attended were
subsequently sent a copy of the Airport's RFP. The seven
firms which received the RFP were Airport Consulting
Incorporated, Blazers Airport Advertising, Cartelera
Communications, Eller Media (Transportation Media,
Inc.), Foster Media, JC Decaux (Skysites Airport
Advertising), and Leigh Fisher Associates. The Airport's
RFP was issued at the same time as a consortium of
airlines issued a similar RFP for a separate advertising
program in the loading bridges (the moveable corridors,
mostly owned by the airlines, which connect the terminals
to the airplanes). Mr. Rhoades states that on October 23,
2000 the Airline Consortium chose Transportation Media,
Inc. out of the three proposals which were submitted to
the Airline Consortium (see Comments No. 4 - 9). In
response to the Airport's RFP, on October 27, 2000 the
Airport received only one proposal from Transportation
Media, Inc. which had already been awarded the Airline
Consortium's loading bridge advertising program license
agreement. Attachment I, provided by the Airport,
1 The Airport's Design and Review Committee consists of Mr. Michael Allen (Project Manager,
Bureau of Design and Construction), Mr. Amir Koleini (Principal Architect, Facilities, Operations
and Maintenance), and Mr. Robin Chiang (Architect).
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance and Labor Committee
January 31, 2001 Finance and Labor Committee Meeting
explains why the Airport only received one bid in response
to its RFP.
2. The responsiveness of Transportation Media, Inc.'s
proposal to the Airport RFP's minimum standards was
evaluated by a five-member evaluation team comprising
two outside consultants who are experts in design and
advertising, one senior airline representative involved in
advertising and promotions, an Airport official
responsible for exhibitions, and an Airport Finance
official. The Transportation Media, Inc. proposal included
a Minimum Annual Guarantee to the Airport of
$4,050,000 in the first year of the proposed lease, which is
$2,050,000 or 102.5 percent more than the Minimum
Annual Guarantee of $2,000,000 required under the
Airport's RFP.
3. The Minimum Annual Guarantee of $4,050,000 in
Year 1 represents an average of approximately $28,125
per year for each of the 144 advertising sites. According
to Mr. Rhoades, the actual amount charged to each
advertiser by Transportation Media, Inc. for each of those
144 advertising spaces will be determined by rate cards
which are set according to market values. The proposed
lease provides for Airport verification of gross advertising
revenues through (a) a monthly gross receipts report
signed by the Lessee, (b) an unqualified year-end report
certified by a certified public accountant, (c) periodic
audits of the Lessee's gross receipts, and (d) other reports
and submissions requested at the discretion of the Airport
Director. According to Mr. Rhoades, Transportation
Media, Inc. is already booking advertisers to use the
advertising space which will be available under the
proposed lease.
Licensing Agreement Between the Airline
Consortium and Transportation Media, Inc.
4. At the direction of the Finance and Labor Committee,
the Budget Analyst has analyzed the loading bridge
advertising program license agreement between the
Airline Consortium and Transportation Media, Inc. This
license agreement covers the moveable corridors which
connect the terminals to the airplanes. Most of these
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance and Labor Committee
January 31, 2001 Finance and Labor Committee Meeting
moveable corridors are owned by tbe airlines. According
to Mr. Rboades, tbe idea of a loading bridge advertising
program was initiated by a consortium of airlines wbicb
own 60 domestic terminal loading bridges: American,
Alaska, Continental, Delta, Nortbwest, United, and USA
Airways. Tbe Airport Commission approved tbis concept,
extending tbe program to include the 17 loading bridges
the Airport owns in the new International Terminal
which are operated by the San Francisco Terminal
Equipment Company, LLC (SFOTEC), representing 25
airlines which operate international flights out of the
Airport2. In total, the Airline Consortium comprises 29
airlines3 and the loading bridge advertising program
covers a total of 77 loading bridges (60 in the domestic
terminals and 17 in the new International Terminal). Mr.
Rhoades states that, once the Airport Commission
authorized the loading bridge advertising program, the
Airline Consortium ran its own competitive bid process
without any involvement from the Airport. The Airline
Consortium required Transportation Media, Inc. to pay
the Airline Consortium either a Minimum Annual
Guarantee of $75,000 per loading bridge, for a total of
$5,775,000 per year, or 70 percent of gross revenues,
whichever is higher. In turn, the Airline Consortium is
required to pay the Airport either (a) $2,887,500 which is
one half of the Minimum Annual Guarantee amount of
$5,775,000, or (b) 35 percent of gross revenues, whichever
is higher.
5. The Airline Consortium received proposals from three
firms:
(a) Transportation Media, Inc. which, according to Mr.
Quinn, proposed a Minimum Annual Guarantee of
$75,000 per loading bridge, or $5,775,000 in total.
2 SFOTEC members are Aeroflot, Air China, Air France, Alaska Airlines, All Nippon Airways,
Allegro, Alitalia, Asiana, British Airways, Cathay Pacific, China Airlines, Eva Airways, Japan
Airlines, KLM Royal Dutch Airlines, Korean Airlines, Lufthansa, Mexicana, Northwest, Philippine
Airlines, Ryan International, Singapore Airlines, Swiss Air, Taca International, United Airlines, and
Virgin Atlantic.
3 The 29 airlines include 22 SFOTEC members which only operate international flights out of the
Airport, four airlines which only operate domestic flights out of the Airport (American, Continental,
Delta, and USA Airways), and three airlines which operate both international and domestic flights
out of the Airport (Alaska, United, and Northwest).
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance and Labor Committee
January 31, 2001 Finance and Labor Committee Meeting
(b) Skysites Airport Advertising, an affiliate of JC
Decaux, wbich, according to Mr. Quinn, proposed a
Minimum Annual Guarantee of $45,000 per loading
bridge. Mr. Quinn noted that Skysites Airport
Advertising's proposed Minimum Annual Guarantee
was both (1) $30,000 per loading bridge less than the
Minimum Annual Guarantee required by the Airline
Consortium, and (2) based on an unrealistically high
passenger throughput assumption of 2,000
passengers per loading bridge per day which only
United Airlines' loading bridges currently meet.
(c) InPlaneView, Inc. which, according to Mr. Quinn,
submitted neither a Minimum Annual Guarantee
nor a performance bond.
The Airline Consortium chose Transportation Media, Inc.
which was the only proposer to meet the Airline
Consortium's Minimum Annual Guarantee requirements.
Attachment II, provided by the Airport, outlines the
history and financial arrangements of the loading bridge
advertising program.
6. Mr. Quinn advises that each member of the Airline
Consortium will sign an identical licensing agreement
with Transportation Media, Inc. These documents cite
the Airport's 50 percent required payment from either the
Minimum Annual Guarantee received by the Airline
Consortium (which is $2,887,500 for the Airport), or the
70 percent of gross revenues (which is 35 percent of gross
revenues for the Airport), whichever is higher. Once
these licensing agreements have been signed, Mr. Quinn
advises that the Airport will require each member of the
Airline Consortium to sign a third party agreement with
the Airport. This third party agreement (a) approves
airline installation of advertising in the loading bridges,
(b) establishes the Airport as a third party beneficiary,
and (c) provides the Airport with the right to terminate
the loading bridge advertising program license agreement
between the Airline Consortium and Transportation
Media, Inc. upon 30 days written notice from the Airport
Director, at which time each airline would be required to
cease all advertising on its loading bridges and remove
the advertising panels.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance and Labor Committee
January 31, 2001 Finance and Labor Committee Meeting
7. At the Finance and Labor Committee meeting of July
17, 2001, the Budget Analyst had questioned why the
loading bridge advertising program license agreement
between the Airline Consortium and Transportation
Media, Inc. (in contrast to the subject proposed lease
between the Airport and Transportation Media, Inc.), and
the resulting revenues of at least $2,887,500 per year for
the Airport, were not subject to Board of Supervisors
approval. Mr. Rhoades states that the loading bridge
advertising license agreement is between the Airline
Consortium and Transportation Media, Inc. and that the
Airport is not a party to that license agreement. With
regard to the Airport's ability to receive revenues from the
loading bridge advertising program without first
obtaining Board of Supervisors approval, Ms. Mara
Rosales and Ms. Adrienne Go of the City Attorney's Office
state that the Airport's legal authority to receive such
revenues stems from the Airport's Lease and Use
Agreements with the airlines, which were previously
approved by the Board of Supervisors in 1981. According
to Ms. Rosales and Ms. Go, under these Lease and Use
Agreements, the Airport Director has the authority to
consent to variations to the prescribed uses of the Airport
space leased by the airlines. Therefore, Ms. Rosales and
Ms. Go state that, as a condition to granting his consent
to such advertising, the Airport Director required the
Airline Consortium to share a negotiated percentage of
the resulting revenues with the Airport. In requiring a
share of the advertising revenues in return for allowing
the Airline Consortium to advertise on the loading
bridges, the Airport Director has acted within the scope of
the Lease and Use Agreements previously approved by
the Board of Supervisors. Therefore, Ms. Rosales and Ms.
Go state that the loading bridge advertising revenues of
at least $2,887,500 to be received by the Airport directly
from the Airline Consortium do not require separate
Board of Supervisors approval.
8. Mr. Quinn states that United Airlines gave
Transportation Media, Inc. notice to proceed with
installing the first advertising on its loading bridges from
January 18, 2001. The Airport will receive 35 percent of
the gross revenues from this advertising. Such revenue
will not contribute toward the Minimum Annual
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance and Labor Committee
January 31, 2001 Finance and Labor Committee Meeting
Guarantee because the hcensing agreements between
each airline and Transportation Media, Inc. have not yet
been signed. Payment of the Minimum Annual
Guarantee will commence once those hcensing
agreements have been signed, according to Mr. Quinn.
Comparison Between the Airport's Proposed Lease
with Transportation Media, Inc. and the Airline
Consortium's License Agreement with
Transportation Media, Inc.
9. On the basis of a detailed comparison between the
license agreement between the Airline Consortium and
Transportation Media, Inc. and the subject proposed lease
between the Airport and Transportation Media, Inc., the
Budget Analyst concludes that the economic provisions
contained in each of the two contracts are fundamentally
comparable and result in reasonable revenues being paid
to the Airport. Under the hcensing agreement between
the Airline Consortium and Transportation Media, Inc.
and the proposed subject lease between the Airport and
Transportation Media, Inc., the Airport would receive
total additional revenues of at least $6,937,500 annually
under the combined Minimum Annual Guarantees. As
previously noted, the Airport Director can terminate the
license agreement between the Airline Consortium and
Transportation Media, Inc. upon 30 days written notice,
at which time each airline would be required to cease all
advertising on its loading bridges and remove the
advertising panels.
Recommendation: Approve the proposed resolution.
BOARD OF SUPERVISORS
BUDGET ANALYST
c JAN.04'2001 15:55 650 794 4519
CONCESSION DEV S MGMT
Attachment I
SFO
San Francisco International Airport
MEMORANDUM
P.O.Box 8097
San Francisco. CA 9412S
Tei 6S0. 821.5000
Fax 6S0. 321.5005
www.flyjfo.com
AIRPORT
COMMISSION
CUT ANQ COUNTY
OtSAN FRANCISCO
wau< L. jrown, jr.
TO: Alan Gibson
Budget Analyst *
FROM: Bob Rhoades v°^
Deputy Airport Director
Business Division
SUBJECT: Request for Proposal Response
DATE: January 4, 2001
HENRY E.BERMAN
LARRY MAZZOLA
Via MtSIOIHT
MICHAEL S. STRUNSKY
LINDAS. CRAYTON
JOHN I.MARTIN
aiwort oiacaon
This is in response to your email dated January 3, 2001, regarding "further information
request". This memorandum is addressing question no. 2, pertaining to Transportation
Media, Inc., being the sole response to the Airport Advertising Request for Proposal.
On June 28, 2000, the Airport conducted a pre-proposal conference for the Airport
Advertising Program. Through Concession Development and Management's outreach,
twenty- five companies were identified through a national search and were issued the pre-
proposal document.
Seven advertising companies responded and attended the pre-proposal informational
conference (a list of the companies have been emailed to you). Transportation Media,
Inc. was the only company to respond and to participate in the proposal process of the
Airport Advertising Program.
Separately, Transportation Media, Inc. and JCDecaux/SkySites participated in a separate
request for proposal issued and awarded (on behalf of the airlines) the loading bridge
advertising program. Transportation Media, Inc., being the successful proposer, was
awarded with this operating agreement.
cc: Patrick Quinn
Concession Development and Management
J ' ' "JAN. 04-2001 15:55 650 794 4519
CONCESSION DEV I HGMT
.Attachment ]
San Francisco International Airport
MEMORANDUM
P.O. Box 8097
5«n Frand>co.CA >«12fl
Tel 650. 821.SOOO
Fax 650.821.5005
www.flyjfo.com
airport
{ommiiiiod
city aho county
or :an francisco
HlhUI L. BROWN. JR.
HArOK
HINRY 6- 1CRMAN
'RC5IDCHT
LARRY MAZZOIA
VICC PRCSIDIHT
MICHAtlS. 3TRUN5KY
I.INOA S.CRAYTON
JOHN L MARTIN
AlKPOKT DlRtCTO*
TO: Alan Gibson DATE: January 4, 200 1
Budget Analyst
FROM: Bob Rhoades
Deputy Airport Director
Business Division
SUBJECT; Loading Bridges
In response to your email dated January 3, 2001, regarding "further information request",
this memorandum is addressing question no.3, pertaining to the legal authority the
airlines control the loading bridge advertising space and revenues.
In February 2000, the Airport amended its long standing position on commercial
advertising in certain non-terminal areas. One of the areas the airport expanded included
the airline-owned loading bridges in the domestic terminals. In order to allow the airlines
to commercially advertise in their loading bridges, the airport made an agreement with
the airlines that all revenues would be split in half between the Airport and the airlines.
In return, the Airport provided the airlines the same opportunity with the loading bridges
in the international terminal, which the Airport owns.
AvAirPros conducted a Request for Proposal (RFP) for the loading bridges on behalf of
the airlines to facilitate the RFP process. The contract had three proposers:
Transportation Media, Inc., A Division of Eller Media; JCDecaux - SkySites; and
InPlaneView. Transportation Media, Inc. was awarded the contract based on their
proposal.
Memo to Finance Committee
January 31, 2001 Finance Committee Meeting
Item 2 - File 00-2187
Note: This item was continued by the Finance and Labor Committee at its
meeting of January 17, 2001.
Department:
Item:
Contract Term:
Description:
Department of Public Health (DPH)
Resolution authorizing the Director of Public Health and
the Purchaser to execute a contract between the City and
County of San Francisco and Health Advocates, LLP to
provide uncompensated care recovery services.
March 1, 2001 through December 31, 2002 (approximately
22 months).
Uncompensated care recovery services include the
assistance to complete Supplemental Security Income
(SSI) and Medi-Cal eligibility applications on behalf of
DPH patients, and representation and legal assistance for
patients in SSI fair hearings and appeals, for the purpose
of collecting unpaid inpatient hospital bills for DPH
services that are provided to indigent patients. The
proposed resolution would authorize DPH to enter into a
contract with Health Advocates, LLP (HA), a private
contractor, to provide an uncompensated care recovery
program.
The DPH issued a Request for Proposals (RFP) in
September of 2000, and received the following two bids in
response to its RFP: (1) Health Advocates, LLP for
$1,180,000 each contract year and, (2) Paralign for
$1,090,000 each contract year. Attachment I, provided by
Ms. Monique Zmuda from the DPH, indicates that the bid
amounts were based on estimated annual revenue of
$6,000,000, which has since been reduced to $5,800,000.
Ms. Zmuda further advises in Attachment I that HA
reduced its bid by $90,000 to $1,090,000 each contract
year, the same amount bid by Paralign, after negotiations
with the DPH. According to Ms. Zmuda, HA was selected
based on the DPH's evaluation of the established criteria,
which awards points based on recent relevant experience,
the scope of work to be performed, the quality of past
projects and cost. Ms. Zmuda states that the DPH also
required the bidder to provide these services by multi-
lingual and multi-cultural staff. Ms. Zmuda further
states that the DPH also built in additional services into
the scope of work, including following up on treatment
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
January 31, 2001 Finance Committee Meeting
authorization requests, and incurring the cost of re-billing
for services provided, once the clients have been made
eligible for Medi-Cal.
According to Ms. Zmuda, the DPH has contracted out
uncompensated care recovery services since 1988 to help
supplement in-house efforts on uncompensated care
recovery services. Ms. Zmuda advises that San Francisco
General Hospital (SFGH) has an internal staff of ten
Hospital Eligibility Workers to assist SFGH patients in
identifying financial resources to pay for inpatient
hospitalization for which no source of funding is currently
available. Eligibility determination, which is provided by
DPH personnel, and authorized by the City's Department
of Human Services, typically includes assistance in
applying for Medi-Cal or SSI, and making appropriate
third-party claims. The contractor will handle those cases
which the internal DPH eligibility workers have deemed
"unreimburseable," usually involving former inpatients
who have been discharged form SFGH. These
uncompensated care services include identifying financial
resources to pay for the care provided, field work on
behalf of indigent patients, such as visits to homeless
shelters; assistance in obtaining further medical
treatments or evaluations, as necessary; efforts to locate
former inpatients whose addresses are not known, and
patient advocacy and representation in appealing denials
of benefits to administrative agencies.
Based on a prior year actual recovery from contracting
this service, Ms. Zmuda advises that the DPH was paid
approximately $5,800,000 a year, or approximately
$483,333 a month from making indigent patients eligible
for third-party payment. The DPH anticipates the same
level of annual reimbursement to be made under the
proposed contract period.
The proposed subject contract would only pay the
contractor a percentage of the revenues actually collected,
on behalf of the City, according to the following schedule:
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
January 31, 2001 Finance Committee Meeting
Cumulative Revenues Generated Contingency Fees
Each Contract Year Paid to the Contractor
$0 to$ 1,999,999 NET 20 percent
$2 million to$2,999,999 NET 18 percent
$3 million and above NET 16 percent
"NET' is used to describe the actual cash received by
SFGH as opposed to any unique program determinations
of allowable amounts and the deduction of contractual
allowances. In accordance with the contract provisions,
HA would be paid a varying fee by the DPH based on the
percentage of the revenues collected by the contractor.
Comments: 1. As indicated above, the proposed contract would
extend for the 22-month period from March 1, 2001
through December 31, 2002. According to Ms. Zmuda,
DPH expects to realize approximately $10,633,333 in
additional revenues under this 22-month contract, with
the contractor to be paid an estimated $1,884,667, or an
overall average of 17.72 percent of the revenue collected,
for net estimated revenues to the City of $8,748,667 for
the term of the 22-month contract. Attachment II,
provided by DPH, highlights the estimated revenue and
contingency fees associated with the subject contract
agreement. As mentioned above, the actual contingency
fees paid to HA will depend on the revenue realized
during the contract period.
2. The proposed subject resolution authorizes the
Director of Public Health and the Purchaser to make
amendments to the subject contract, if needed. According
to Ms. Zmuda, this is a standard provision in all of the
DPH's contracts, which allows the DPH to make minor
changes, such as including an additional scope of work
requirement or extending a contract for a few months
while an RFP is in process, but not change the intent of
the original contract.
3. At the Finance and Labor Committee Meeting of
January 17, 2001, the Committee requested that the DPH
provide, (a) additional facts pertaining to a protest made
by Paralign, the existing contractor, and (b) the results of
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
January 31, 2001 Finance Committee Meeting
the Human Rights Commission evaluation of the DPH
Request for Proposal Process (RFP), including why the
contract was awarded to a vendor that was not the lowest
bid. Ms. Zmuda states that Paralign appealed the DPH
contract award to Health Advocates and claimed that the
bid evaluation process was flawed. Ms. Zmuda states that
Paralign's claim that the process was flawed was based on
the participation of the Program Manager in the bid
evaluation process. Ms. Zmuda states that it is DPH
policy to include the Program Manager in the evaluation
of bids in order to provide technical assistance to the
evaluation panel. Ms. Zmuda advises that the Paralign
appeal was denied based on the finding that the DPH
followed its policy and that there was no irregularity in
the process.
According to Ms. Zmuda, the Human Rights Commission
has not yet completed its written report for the Finance
and Labor Committee on its evaluation of the DPH RFP
process. Therefore, Ms. Zmuda requests that this item be
continued for one week.
Recommendation: Continue the proposed resolution for one week as
requested by the Department of Public Health.
BOARD OF SUPERVISORS
BUDGET ANALYST
DEC-20-2000 14:18 FROM DPH-CFO
City and County of San Francisco
Date:
Memo To:
From:
Re:
TO HARUEYROSE Attachment I
Department of Public Health
Mitchell H. Katz, M.D.
Director of Health
December 20, 2000
Harvey Rose
Budget Analyst
Monique Zmuda
Chief Financial Officer
Proposed Contract with Health Advocates, LLP
This memo is in response to questions regarding the proposed contract with Health
Advocates LLP, to provide uncompensated care recovery reimbursement services for the
Community Health Network of the Department of Public Health.
The following summarizes the RFP Process:
Date RFP Issued:
Selection Made;
September 29, 2000
November 21, 2000
Number of Bidders: 2- Bom profit-making private firms
Bid Amounts: Both firms were requested to bid on services for revenue recovery of $6
million annually. Although the bid from Health Advocates was 590,000 higher than the
other qualified bidder, Health Advocates had a higher score, and thus was awarded the
contract In contract negotiations with Health Advocates, the Department was successful
in securing a reduction equivalent to $90,000 in the contract rate for the services.
(415) 554-2600
101 Grove Street
Fllmvni and Paih
San Francisco, CA 94102
DEC-20-2000 i4:ia FROM DPH-CFO
TO HflRUEY ROSE
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Memo to Finance Committee
January 31, 2001 Finance Committee Meeting
Item 3 - File 01-0053
Department:
Item:
Department of Public Health (DPH)
Department of Administrative Services (DAS) -
Real Estate Division (RED)
Resolution authorizing and approving a new lease
between the City and County of San Francisco, for the
Department of Public Health, as Lessee, and Seto Family
Trust, as Lessor, for space located at 1421 Broderick
Street.
Location:
Purpose of Lease:
Lessor:
Lessee:
1421 Broderick Street
Residential care facility for approximately 34 individuals
who need 24-hour care and supervision.
Seto Family Trust
The City and County of San Francisco on behalf of the
DPH.
No. ofSq. Ft. and
Cost Per Month:
Annual Cost:
The approximate 12,417 square feet of rentable square
area at a monthly rental rate of $10,000 per month
(approximately $0.81 per square foot per month). On an
annual basis, rent would total $120,000 (approximately
$9.66 per square foot per year) during Year One of the
subject lease. Under the subject lease agreement, on each
anniversary of the 10 year lease, the rental rate would
increase by the percentage increase in the Consumer
Price Index (CPI) for the San Francisco Metropolitan
Area, provided that the percentage increase shall not be
less 2 percent or more than 6 percent.
$120,000 in Year One of the subject lease agreement.
Annual rental costs in subsequent years would be subject
to the annual rent adjustment formula as explained
above.
Utilities and
Janitorial Service:
Provided by a DPH contractor at an estimated annual
cost to DPH of $122,000.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
January 31, 2001 Finance Committee Meeting
Term of Lease:
Right of Renewal:
Source of Funds:
Description:
Approximately ten years, upon approval of subject lease
by the Board of Supervisors to January 31, 2011.
One option to extend the lease for an additional ten years
with the terms and conditions of the lease subject to
negotiations between the City and the Landlord. If the
City chooses to exercise the option, the City must give
written notice to the Landlord no later than 120 days
prior to the expiration of the initial term. All such
renewals are subject to appropriation approval of the
Board of Supervisors.
According to Mr. Marc Trotz from the DPH,
approximately $458,434 in General Fund monies has
been budgeted in FY 2000-2001 for the start-up and
operation costs, including rent, utilities, janitorial
services and contractual services for the residential care
facility to be located at 1421 Broderick Street. In future
years, Mr. Trotz advises that the rent, and other
operating costs associated with the proposed residential
care facility would be funded from (1) the annual DPH
General Fund monies budgeted for housing services
(estimated at $844,000 for FY 2001-2002), (2) revenue
budgeted from Medi-Cal reimbursement (estimated at
$156,000 for FY 2001-2002), and (3) budgeted revenue
from Supplemental Security Income reimbursement for
patient services (estimated at $200,000 for FY 2001-2002)
for total estimated costs of $1,200,000. The lease contains
standard language stating that it will be terminated in
180 days in the event of non-appropriation of funds by the
Board of Supervisors.
The subject master lease would permit the DPH to lease
12,417 square feet of 1421 Broderick Street for
approximately ten years in order to operate the Broderick
Street Residential Care Facility to provide residential
care for approximately 34 individuals who need 24-hour
care and supervision. According to Mr. Trotz, the
proposed Broderick Street Residential Care Facility would
serve (a) individuals who are cognitively impaired and/or
mentally ill; (b) individuals with mobility impairments
and medical conditions who need 24-hour care; and, (c)
individuals with primary medical conditions, including
HIV/AIDS clients. Mr. Trotz states that the DPH will
particularly target individuals who are currently in the
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
January 31, 2001 Finance Committee Meeting
DPH system in need of such care. According to Mr. Trotz,
the proposed facility would be operated through a new
contract with the Page Street Guest House, a nonprofit
organization (see Comment 2).
Comments: 1. The Seto Family Trust operated a Skilled Nursing
Home until July of 2000 at 1421 Broderick Street.
According to Mr. Trotz, there are 16 shared bedrooms and
2 private bedrooms, 12 bathrooms for resident use,
sufficient office space, a staff lunge, an activities room, a
dining room, a full kitchen and a small parking area.
Mr. Trotz states that the DPH proposes to lease the entire
building, including all of the furniture, fixtures and
equipment (see Comment 6). According to Mr. Trotz, the
subject building is in excellent condition with new boilers,
security and alarm systems, is ADA (Americans with
Disabilities Act) compliant and has a commercial grade
kitchen. Mr. Trotz advises that there are no scheduled
improvements for the residential care facility given its
current excellent condition and configuration for use as a
skilled nursing facility. DPH clients would move into
1421 Broderick Street as soon as (1) the subject lease is
approved by the Board of Supervisors, (2) the Health
Commission approves the residential care service contract
for the residential care facility (see Comment 3 below)
and (3) the State of California issues the appropriate
license to operate the facility.
2. Mr. Trotz advises that the DPH plans to enter into a
contract with a nonprofit agency, Page Street Guest
House, at an estimated annual cost of $1,080,000 (See
Comment 4) for the following services:
• Medication monitoring, medical support, psychosocial
services, substance abuse treatment, housekeeping,
meals, and transportation to doctor appointments.
• Professional property management, which would
include program fee collection, accounts payable
maintenance, janitorial and security services and
other provisions needed to maintain a clean, safe and
healthy environment
Mr. Trotz advises that approximately 24 of the estimated
34 patients will be SSI eligible and DPH would be
reimbursed at $750/month each ($9,000 annually per
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
January 31, 2001 Finance Committee Meeting
patient) and the remaining approximately 10 patients
would be funded from the DPH General Fund monies.
The fees for services to be reimbursed by SSI funds are
estimated to be between $200,000 to $216,000 per year
($9,000 x 24 patients). Mr. Trotz states that Medi-Cal
reimbursements are generated through specific medical
and psychiatric services provided on site. Mr. Trotz
estimates the annual Medi-Cal reimbursements would be
approximately $156,000 for FY 2001-2002.
3. The contract was awarded to Page Street Guest House,
a nonprofit organization, to provide the services
mentioned in Comment 2 above, at the residential care
facility based on a Request for Qualifications Process.
Page Street Guest House will subcontract with Richmond
Area MultiServices (RAMS) in the amount of $140,000 to
provide psychosocial services, counseling, mental health
services and activities coordination. Mr. Trotz advises
that in the Request for Qualification Process, the DPH
received two proposals, one from Page Street Guest House
at a cost of $1,555,000 and another from the Chun and
Carter Residential Care Facility for $556,000. Mr. Trotz
notes that the Chun and Carter Residential Care
Facility's proposal was incomplete and did not meet all
service requirements specified in the Request for
Qualifications. Mr. Trotz further advises that the DPH
has not previously contracted with Page Street Guest
House, but notes that Page Street Guest House has
operated a residential care facility on Page Street in San
Francisco for approximately 20 to 30 years. Mr. Trotz
advises that a technical review panel consisting of the
DPH staff and community members determined that Page
Street Guest House had the appropriate qualifications
and experience to run the residential care program at
1421 Broderick Street. According to Mr. Trotz, the DPH
is currently negotiating the specifics of the annual costs of
the contract with Page Street Guest House and should
bring the contract before the Health Commission in
February.
4. According to Mr. Trotz, the estimated final negotiated
contract costs with the Page Street Guest House would be
in the amount of $1,080,000 per year instead of the
previously proposed $1,555,000 per year. Of the estimated
annual costs of $1,080,000 approximately $765,600 would
be expended on staffing costs, and approximately
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
January 31, 2001 Finance Committee Meeting
$314,400 would be expended on operational costs,
staffing costs are as follows:
The
Expenditure Item
Estimated Cost
Program Director (1 FTE)
$50,000
Medical Director (0.2 FTE)
25,000
Activities Coordinator
35,000
Social Worker (1 FTE)
45,000
Case Managers (2 FTE)
70,000
Nurse (2 FTE)
60,000
Cook (2 FTE)
60,000
Dishwasher (1 FTE)
30,000
Janitor/Maintenance (2 FTE)
52,000
Receptionist (4.2 FTE)
126,000
Housekeepers (3 FTE)
85,000
Benefits (20%)
127,600
TOTAL
$765,600
According to Mr. Trotz, the staffing costs above include
personnel funded under the RAMS subcontract costs. The
RAMS subcontract is for approximately $140,000 which
includes the cost of 1 FTE Social Worker, 1 FTE Case
Manager and 1 FTE Program/Activities Coordinator plus
their benefits.
Mr. Trotz estimates the annual operational costs would be
$314,400 as follows:
Expenditure Item
Estimated Cost
Property Taxes
$8,000
Insurance
10,000
Maintenance Services/Repairs
50,000
Supplies (including food)
100,000
Equipment, printing, post
56,400
Laundry
10,000
Utilities
70,000
Program Expenses
10,000
TOTAL
$314,400
Mr. Trotz states that these cost estimates were based on
(a) the operating costs incurred by the Seto Family Trust
while operating a Skilled Nursing Facility at 1421
Broderick Street; and, (b) estimates from Page Street
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
January 31, 2001 Finance Committee Meeting
Guest House on operation costs for residential care
facilities.
5. According to Mr. Trotz, the total estimated costs and
revenue sources for the residential care facility for FY
2000-2001 and for FY 2001-2002 would be as follows:
Costs:
FY 2000-2001 FY 2001-2002
Annual Rent $50,000* $120,000
Service Contract 127,600 765,600
Operations 130,834 314,400
Start-up Costs 150.000 0
Total $458,434 $1,200,000
* 5 months from February 1, 2001 through June 30, 2001.
Revenue Sources:
DPH General Fund
SSI Reimbursements
Medi-Cal
FY 2000-2001
$458,434
0
0
FY 2001-2002
$844,000
200,000
156.000
Total
$458,434
$1,200,000
Mr. Trotz states that the DPH did not specifically budget
revenue from SSI and Medi-Cal for FY 2000-2001 because
the DPH was unsure exactly how many patients would be
at the residential care facility by the end of FY 2000-2001.
Therefore, any SSI and/or Medi-Cal reimbursements
received would be additional revenue to the DPH for FY
2000-2001, enabling the DPH to reduce its net General
Fund support.
As noted in the table above, Mr. Trotz estimates that the
annual total costs would be approximately $1,200,000.
Therefore, the unit costs per patient per year would be
approximately $35,294 ($1,200,000 + 34 patients) and the
cost per patient per day would be approximately $97
($35,294 h- 365 days in a year).
Clients for the proposed residential care facility at 1421
Broderick Street would be transferred from DPH referral
points including San Francisco General Hospital, Laguna
Honda Hospital and the City's Mental Health
Rehabilitation Facility. Mr. Trotz states that it costs
between $250 and $800 per day per person to care for
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
January 31, 2001 Finance Committee Meeting
patients in the above-mentioned DPH facilities, compared
to the daily per person cost of approximately $97 for the
Broderick Street facility. Moving such patients to the
residential care facility at 1421 Broderick allows the DPH
to provide a more appropriate level of care for those
individuals who would otherwise get more expensive care
at Laguna Honda Hospital and San Francisco General
Hospital. Doing so would make beds available at Laguna
Honda Hospital and San Francisco General Hospital for
patients who need a higher level of care. Any potential
savings to be achieved under the proposed program such
as through expenditure reductions at Laguna Honda
Hospital and San Francisco General Hospital will be
subject to future budget policy decisions.
6. Mr. Trotz advises that the furniture, fixtures and
equipment are being provided by the Lessor at an
estimated value of approximately $50,000.
7. Mr. Trotz states that the proposed lease agreement
contains a termination clause (Section 3.5) which permits
the City to terminate the lease for any reason upon 180
days prior written notice. This would permit the City to
terminate the lease in six months in the event of non-
appropriation of the necessary funding by the Board of
Supervisors.
8. Ms. Jean Medlar from the Real Estate Division reports
that the proposed rental rate of $0.81 per square foot per
month represents fair market value.
9. Page two, line five of the proposed resolution
incorrectly states that the base rent is $0.67 per square
foot per month when it should state that the base rent is
$0.81 per square foot per month. Therefore, the proposed
resolution should be amended to revise the base rent
amount to $0.81 per square foot per month.
Recommendations: 1. Amend the proposed resolution to correct an error on
page two, line five, of the proposed resolution, which
states, "Base Rent - $0.67 per square foot per month" to
read, "Base Rent - $0.81 per square foot per month," in
accordance with Comment 9 above.
2. Approve the proposed resolution, as amended.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance and Labor Committee
January 31, 2001 Finance and Labor Committee Meeting
Item 4 -File 01-0104
Department:
Item:
Human Resources Department (HRD)
Fire Department
Resolution authorizing settlement of the grievance filed
by Glenn Alston and the International Federation of
Professional and Technical Engineers, Local 21, AFL-CIO
("Local 21"), on behalf of 16 civilian Classification 6281
Fire Safety Inspectors in the Fire Department pursuant
to the Memoranda of Understand between Local 21 and
the City and County of San Francisco, in the aggregate
amount of $80,080.48.
Settlement Amount: $81,625.52 (see Comment No. 1 below)
Source of Funds:
Description:
According to Ms. Pamela Levin of the Office of the
Controller, the grievance settlement monies would be
funded from the Fire Department's existing FY 2000-01
budget.
The proposed resolution would authorize the Human
Resources Director to settle a grievance filed by Mr.
Glenn Alston and Local 21 against the City. Mr. Alston is
a Fire Department employee in the civilian Classification
6281 Fire Safety Inspector. This grievance was filed by
Mr. Alston and Local 21 on behalf of the 16 civilian
Classification 6281 Fire Safety Inspectors in the Fire
Department who did not receive additional specialized
training to perform "life-safety testing", or fire alarm
testing required by the Department of Building
Inspection, which had been received by uniformed H-4
Inspectors in the Fire Department. As a result of
receiving such specialized training, the uniformed H-4
Inspectors were eligible to work additional overtime
hours.
According to the grievance filed by Local 21, the 16
employees alleged that the Fire Department violated
Section 123(a) of the three-year Memorandum of
Understanding (MOU) between the City and Local 21
previously approved by the Board of Supervisors for
Fiscal Years 1998-99 through 2000-01. The basis for the
Local 21 grievance is that by not providing civilian 6281
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance and Labor Committee
January 31, 2001 Finance and Labor Committee Meeting
Fire Safety Inspectors with the opportunity to receive the
same additional specialized training given to uniformed
H-4 Inspectors, the Fire Department effectively denied
the civilian 6281 Fire Safety Inspectors the opportunity to
work on an overtime basis and to receive such overtime
pay in an amount equivalent to the uniformed H-4
Inspectors.
According to Ms. Alice Villagomez of HRD, since Section
123(a) of the previously approved MOU states that the
civilian 6281 Fire Safety Inspectors shall receive parity
for overtime with the uniformed H-4 Inspectors, the
grievance claim is justified.
The grievance proceeded to arbitration in April of 2000
but the Arbitrator recommended that the City and Local
21 negotiate a settlement in lieu of a third party award
determined by the Arbitrator. The resulting settlement
negotiated between the City and Local 21 would, if
approved by the Board of Supervisors, authorize the City
to pay overtime wages retroactive for the approximately
21.5 month period from July 1, 1998 through April 19,
2000 in the total amount of $81,625.52, as follows:
• $5,115.39 for each of 14 employees who filed the
grievance, for a total of $71,615.46.
• $5,005.03 for each of two employees1 who filed the
grievance, for a total of $10,010.06.
The calculation of the above amounts is based on the
information contained in the Attachment provided by
HRD. Mr. Gran states that the July 1, 1998 date is based
on the filing date of the grievance2, and the April 19, 2000
date is based on the arbitration hearing date.
Comments: 1. In reviewing the calculations for the proposed
settlement amount, the Budget Analyst found that the
total amount had been understated by $1,545.05,
resulting in a correct total settlement payable by the City
1 According to Ms. Mary Hao of HRD, two of the 16 civilian 6281 Fire Safety Inspectors received a
slightly lower amount because they did not qualify for the longevity and educational bonuses for
which the other 14 employees were qualified to receive.
2 Mr. Gran advises that the grievance was filed on July 28, 1998, but that under the MOU, the claim
can extend retrospectively for up to 20 working days prior to the date that the claim is actually filed.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance and Labor Committee
January 31, 2001 Finance and Labor Committee Meeting
of $81,625.52, instead of the amount of $80,080.48 as
contained in the proposed resolution. Mr. Martin Gran of
the City Attorney's Office concurs with the Budget
Analyst's calculation.
2. Mr. Gran concurs with Ms. Villagomez's statement
that the proposed settlement agreement is justified
because the MOU, as previously approved by the Board of
Supervisors, provides for parity in overtime between the
civilian 6281 Fire Safety Inspectors and the uniformed H-
4 Inspectors. Furthermore, Mr. Gran advises that the
City prefers the narrowly tailored negotiated settlement
to a final and binding third party award, as would have
been issued by the Arbitrator if the parties had failed to
negotiate the proposed settlement agreement, because (a)
such an award could potentially affect other wage and
benefits issues beyond the specific life-safety testing
training parity issue, raised in the grievance, and (b) the
City would have been required to accept the Arbitrator's
award amount which could have been greater than the
proposed settlement amount.
3. According to Ms. Mary Hao of HRD, as required by the
proposed settlement agreement, the Fire Department has
trained all 16 civilian 6281 Fire Safety Inspectors in fire
alarm testing and now all 16 employees are certified to
work on fire alarm testing required by the Department of
Building Inspection, and are therefore eligible to receive
pay for future overtime work on such responsibilities.
4. Under the proposed settlement agreement, the 16
civilian employees would expressly waive any right to
recover any of their legal expenses.
Recommendations: 1. Increase the aggregate amount of $80,080.48, as
contained in the proposed resolution, by $1,545.05 to
$81,625.52 to reflect the correct settlement amount
calculation, in accordance with Comment No. 1 above.
2. Approval of the proposed resolution, as amended, is a
policy matter for the Board of Supervisors.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance and Labor Committee
January 31, 2001 Finance and Labor Committee Meeting
[arvey M. Rose
Supervisor Leno
Supervisor Peskin
Supervisor Gonzalez
Clerk of the Board
Controller
Steve Kawa
BOARD OF SUPERVISORS
BUDGET ANALYST
JAN 25*01 10:50 FR
City "and County of San Francisco
December 1 1 , 2000
To:
415 55? 4919
Attachment
i"age 1 of" 2
Department of Human Resources
ANDREA R. GOURDINE
HUMAN RESOURCES DIRECTOR
Andrea Gourdine
Director, Departmentof Human Resources
lan
Geoff Rothrh
Director, Enploye
Department
From:
RE:
e Relations Division
of Human Resources
MaryHaoT^FV
Employee Rfflago^Representative
Glenn Alston, et a/ (Fire Safety Inspectors) Grievance
ERD Reference No. 31-99-0326
Attached for your signature is the Settlement Agreement for the above-referenced
matter.
This grievance dealt with overtime parity as provided in Local 21 MOU Section 123(a).
Pursuant to this section, the Class 6281 Fire Safety Inspectors (represented by Local
21) are guaranteed overtime parity with the H-4 Inspector class (represented by Local
798), except to the extent that overtime assignments require fire suppression skills that
the Class 6281 Fire Safety Inspectors do not have. Fire Safety Inspectors are not
sworn, uniformed personnel, as they have not have gone through the fire academy like
the H-4s; however, the life safety testing overtime assignment does not require any fire
suppression skills and yet the Fire Safety Inspectors were denied this overtime
assignment for many years. This grievance was filed over two years ago, and therefore
back pay goes back foil that time. The class of grievants affected was sixteen (16)
Class 6281 Fire Safety Inspectors.
During the April 19, 2000 arbitration hearing, the parties agreed to settle this matter.
The Union and the Department agreed that the Department would pay the sixteen (16)
Class 6281 Fire Safety Inspectors 38%1 of the total life safety overtime assignments (in
hours) earned by the H-p classification between July 1, 1998 and April 19, 2000. Once
the 38% figure was applied, the overtime rate applicable to the Fire Safety Inspectors
was then computed. The total value of the Fire Safety Inspectors overtime rate times
1 38% represents the percentage that fire safety inspectors are of the total number of uniformed and
civilian inspectors. Class 62^1 Fire Safety Inspectors actually represent 42% of the total number of
uniformed and civilian inspectors; however after further discussions, the parties agreed to use 38%
instead.
44 Gough Street • San Francisco. CA 94101-1213
JRN 25'01 10:50 FR
Andrea Gourdine
Geoff Rothman
December 1 1 , 2000
Page 2
their 38% of the total
among the sixteen
lesser amount because
(3% of overtime.) To
415 557 4919 TG
Attachment
£age 2 ot 2
Life Safety overtime hours worked was then distributed equally
ffectud inspectors. Two of the sixteen inspectors received a slightly
tiey did not qualify for the longevity and the educational bonus
, the formula used is as follows:
recap
"Total number of Life Safety overtime hours between July 1, 1998 and April 19, 2000
Times
38% (the percentage that Fire Safety Inspectors are of the total number of uniformed
and civilian inspectors)
Times
overt me rate applicable to Fire Safety Inspectors
Divided by
16"
Then Chief of
approved of this calculat
Department Demmons and Bureau of Fire Inspection Chief Massetani
on. The total cost of this settlement is $81 ,625.52.
Please do not hesitate to
your prompt attention to
contact me at x4981 if you have any questions. Thank you for
this matter.
\\OHR-MlS-0iSVR\DATA\SHARE\4RO\GrievancesWston s«Demenc memo.doc
Main Library
[All Committees]
City and County of £an Francisco Government Document Section
Meeting Minutes
Finance Committee
Members: Supervisors Mark Leno, Aaron Peskin and Matt Gonzalez
Clerk: Gail Johnson
lO ) Wednesday, February 07, 2001
10:00 AM
Regular Meeting
City Hall, Room 263
Members Present: Mark Leno, Aaron Peskin, Matt Gonzalez.
MEETING CONVENED
002053
The meeting convened at 10:06 a.m.
DOCUMENTS DEPT.
FEB 1 h 2001
SAN FRANCISCO
PUBLIC LIBRARY
[Golden Gate/Neighborhood Park Bond Award]
Supervisor Newsom
Motion awarding Bonds and fixing definitive interest rates for $17,060,000 General Obligation Bonds (Golden
Gate Park Improvements, 1992) and Series 2000E; $14,060,000 General Obligation Bonds (Neighborhood
Recreation and Park Facilities Improvement Bonds, 2000) Series 2000F. (Mayor)
1 1/15/00, RECEIVED AND ASSIGNED to Finance and Labor Committee.
2/1/01 , TRANSFERRED to Finance Committee. New committee structure.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Karen Ribble, Bond Associate, Mayor's Office
of Public Finance.
AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE.
Motion awarding Bonds and fixing definitive interest rates for $17,060,000 General Obligation Bonds (Golden
Gate Park Improvements, 1992) and Series 2001A; $14,060,000 General Obligation Bonds (Neighborhood
Recreation and Park Facilities Improvement Bonds, 2000) Series 200 IB. (Mayor)
AWARDED by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
010039 [Airport Lease Agreement Modification for United Airlines, Inc.]
Resolution approving Lease Modification Number Three for Lease No. 73-0066 between United Airlines, Inc.
and the City and County of San Francisco, acting by and through its Airport Commission. (Airport Commission)
1/2/01 , RECEIVED AND ASSIGNED to Finance and Labor Committee.
2/1/01, TRANSFERRED to Finance Committee. New committee structure.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; John Martin, Airport Director; Theodore
Lakey, Deputy City Attorney; Gary Franzella, Assistant Deputy Airport Director, Aviation Management,
Airport.
Continued to February 21, 2001.
CONTINUED by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
City and County of San Francisco
Printed at 2:59 P.\f on 2/1 ZVl
Finance Committee
Meeting Minutes
February 7, 2001
010052 [Airport Lease Agreement for Plot 6 to United Airlines, Inc.]
Resolution approving lease agreement for Plot 6 between United Airlines, Inc. and the City and County of San
Francisco, acting by and through its Airport Commission. (Airport Commission)
1/10/01, RECEIVED AND ASSIGNED to Finance and Labor Committee
2/1/01 , TRANSFERRED to Finance Committee. New committee structure.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; John Martin, Airport Director; Theodore
Lakey, Deputy City Attorney.
Continued to February 2 1 , 2001.
CONTINUED by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
010047 |Law Enforcement Training]
Resolution authorizing the Chief of Police to execute an agreement with the State of California to obtain
funding in the amount of One Hundred Three Thousand Three Hundred Fifty Eight Dollars ($103,358) for
obtaining training equipment. (Police Department)
1/8/01, RECEIVED AND ASSIGNED to Housing and Social Policy Committee.
2/1/01, TRANSFERRED to Finance Committee. New committee structure.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Lieutenant Richard Parry, Police Department.
RECOMMENDED., by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
002187 [Contract between the Dept. of Public Health and Health Advocates, LLP to provide uncompensated
care recovery services]
Resolution authorizing the Director of Public Health and the Purchaser to execute a contract between the City
and County of San Francisco and Health Advocates, LLP to provide uncompensated care recovery services.
(Public Health Department)
12/13/00, RECEIVED AND ASSIGNED to Public Health and Environment Committee.
12/28/00, TRANSFERRED to Finance and Labor Committee. At the request of the President, this matter is to be scheduled for the
January 10, 2001 meeting.
1/17/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Monique Zmuda, Chief Financial Officer,
Department of Public Health, Steve Reid, President, Paralign; Diane Sovereign (attorney), Linda Safir, Director of Sales, Paralign, Karla
Fine, Manager, Paralign; Fanny Mayorga, Paralign; Juan Sosa, Paralign; Helen Lim, Paralign, Robert McCarthy (registered to speak for
Paralign); Al Leibovic, Health Advocates; Theodore Lakey, Deputy City Attorney; Edward Harrington, Controller.
Continued to January 3 1 , 2001 .
1/31/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Monique Zmuda, Chief Financial Officer,
Department of Public Health.
Continued to February 7, 2001 .
2/1/01 , TRANSFERRED to Finance Committee. New committee structure.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Monique Zmuda, Chief Financial Officer,
Department of Public Health; Virginia Harmon, Interim Director, Human Rights Commission; Diana Rivera,
Head of Patient Accounting, San Francisco General Hospital, Department of Public Health; Cheryl Bregman,
Deputy City Attorney; Steve Reid, President, Paralign; Al Leibovic, Managing Partner, Health Advocates;
Linda Safir, Director of Sales, Paralign; Karla Fine, Manager, Paralign; Jose Martinez, Account Director,
Paralign; Fanny Mayorga, Supervisor, Paralign; Luvi Bone, Paralign; Beatrice Gonzalez, Paralign; Patricia
Putynkowski, Paralign; Juan Sosa, Paralign; Rafael Arteagia, Paralign; Helen Lim, Paralign; Diane
Sovereign, Attorney, representing Paralign; Lock Holmes, Attorney, representing Paralign; Robert McCarthy,
representing Paralign.
CONTINUED TO CALL OF THE CHAIR by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
City and County of San Francisco
Printed at 2:59 PM on 2/12/01
Finance Committee
Meeting Minutes
February 7, 2001
010112 [Reserved Funds, Workers' Compensation]
Hearing to consider release of reserved workers' compensation funds (2000-2001 budget) for eight (8)
departments - Fire, Police, Public Health, Human Services, Sheriff, Parking and Traffic, Juvenile Court, and
Recreation and Park in the amount of $9,410,038 to cover expenditures for the remainder of the current fiscal
year. (Human Resources Department)
1/19/01, RECEIVED AND ASSIGNED to Finance Committee.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Edward Harrington, Controller; Minh Vu,
Deputy Director, Workers Compensation Division, Department of Human Resources.
Release of reserved funds in the amount of $9,410,038 approved.
APPROVED AND FILED by the following vote:
Ayes: 2 - Leno, Peskin
Absent: 1 - Gonzalez
010150 [Final Negative Declaration, Jobs-Housing Linkage Ordinance]
Resolution adopting Final Negative Declaration, finding and determining that the Jobs-Housing Linkage
Ordinance will have no significant impact on the environment, and adopting and incorporating findings of Final
Negative Declaration. (Planning Department)
(Final Negative Declaration adopted and issued on April 27, 1999.)
1/24/01, RECEIVED AND ASSIGNED to Finance Committee.
Heard in Committee. Speakers: Supervisor Ammiano; Harvey Rose, Budget Analyst; Gerald Green, Director
of Planning; Marcia Rosen, Mayor's Office of Housing; Calvin Welch, Council of Community Housing; Jim
Chappell, President, SPUR; Jose Wheelock; Theodore Lakey, Deputy City Attorney.
RECOMMENDED by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
City and County of San Francisco
Printed at 2:59 PM on 2/12/01
Finance Committee Meeting Minutes February 7, 2001
000276 [Planning Code amendment to rename "Office Affordable Housing Production Program" as the "Jobs-
Housing Linkage Program" and to apply the program to hotel, entertainment, and retail space
according to square footage]
Supervisors Ammiano, Bierman
Ordinance amending Article III, Chapter II, Part II of the San Francisco Municipal Code (Planning Code) by
amending Sections 313, 313.1, 313.2, 313.3, 313.4, 313.5, 313.6, 313.7, 313.8, 313.9, 313.10, 313.11, 313.12,
313.13, and 313.14, to rename the "Office Affordable Housing Production Program" as the "Jobs-Housing
Linkage Program," to apply the program to all new and expanded hotel space of at least 25,000 square feet, to
all new and expanded entertainment space of at least 25,000 square feet, to all new and expanded retail space of
at least 25,000 square feet, and to all new and expanded research and development space of at least 25,000
square feet; to set forth the number of housing units to be constructed for each type of development subject to
this Ordinance; to increase the number of housing units and fees for office developments; and by adding
Section 313.15 to require a study every five years determining the demand for housing created by commercial
development.
2/9/00, PREPARED IN COMMITTEE AS AN ORDINANCE. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Julian
Low, Supervisor Katz's Aide; Gerald Green, Director of Planning, Supervisor Bierman; Supervisor Ammiano; Ted Lakey, Deputy City
Attorney; Calvin Welch; Jim Gonzalez, Information Technology Coalition, Mane Jones, S F. Partnership, Robert McCarthy; Chns
Moore. To be referred to City Planning for review and comments.
2/9/00, CONTINUED TO CALL OF THE CHAIR. 2/1 5/00. Referred to City Planning Commission. 3/22/00, From City Planning, will
not be able to hear this item until May 15.
5/10/00, AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE. Heard in Committee Speakers Supervisor
Ammiano; Calvin Welch, Council of Community Housing; Sue Hestor; Chris Daly, Mission Agenda, Beryl Magilavy; Joyce Miller,
Marie Jones, S. F. Partnership; Cathy Brandhorst. Referred to City Planning Commission.
5/10/00. CONTINUED AS AMENDED. Continued to call of the chair.
6/5/00, SUBSTITUTED. Supervisor Ammiano submitted a substitute ordinance bearing new title
6/5/00, ASSIGNED to Finance and Labor Committee. Transmitted to Planning Commission for public hearing and recommendation.
10/16/00, SUBSTITUTED. Supervisor Ammiano submitted a substitute ordinance bearing new title.
Transmitted to Planning Commission for public hearing and recommendation.
10/16/00, ASSIGNED to Finance and Labor Committee.
2/1/01 , TRANSFERRED to Finance Committee. New Committee Structure.
Heard in Committee. Speakers: Supervisor Ammiano; Harvey Rose, Budget Analyst; Gerald Green, Director
of Planning; Marcia Rosen, Mayor's Office of Housing; Calvin Welch, Council of Community Housing; Jim
Chappell, President, SPUR; Jose Wheelock; Theodore Lakey, Deputy City Attorney.
Supervisor Ammiano presented an Amendment of the Whole containing technical amendments.
AMENDED, AN AMENDMENT OF THE WHOLE BEARING SAME TITLE.
RECOMMENDED AS AMENDED by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
City and County of San Francisco 4 Printed at 2: 59 PM on 2/12/01
Finance Committee Meeting Minutes February 7, 2001
010149 [Jobs-Housing Linkage Program]
Ordinance amending Article III, Chapter II, Part II of the San Francisco Municipal Code (Planning Code) by
amending Sections 313, 313.1, 313.2, 313.3, 313.4, 313.5, 313.6, 313.7, 313.8, 313.9, 313.10, 313.11, 313.12,
313.13, and 313.14, to rename the "Office Affordable Housing Production Program" as the "Jobs-Housing
Linkage Program," to apply the program to all new and expanded hotel space of at least 25,000 square feet, to
all new and expanded entertainment space of at least 50,000 square feet, and to all other new and expanded
retail space of at least 100,000 square feet; to set forth the number of housing units to be constructed for each
type of development subject to this ordinance; to set forth fees for each type of development subject to this
ordinance; to increase the number of housing units and fees for office developments; and by adding Section
313.15, to require a study every five years determining the demand for housing created by commercial
development. (Planning Department)
(Planning Resolution No. 16044 adopted December 7, 2000 recommending the proposed amendment to the
City Planning Code; Planning File No. 1999.178T.)
(Companion measure to File 010150.)
1/24/01, RECEIVED AND ASSIGNED to Finance Committee. Board President requests this item be calendard at the February 7, 2001
meeting
Heard in Committee. Speakers: Supervisor Ammiano; Harvey Rose, Budget Analyst; Gerald Green, Director
of Planning; Marcia Rosen, Mayor's Office of Housing; Calvin Welch, Council of Community Housing; Jim
Chappell, President, SPUR; Jose Wheelock; Theodore Lakey, Deputy City Attorney.
TABLED by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
ADJOURNMENT
The meeting adjourned at 1:32 p. m.
City and County of San Francisco 5 Printed at 2:59 PM on 2/12/01
[Budget Analyst Report]
Susan Horn
Main Library-Govt. Doc. Section
n
1/7/0/
CITY AND COUNTY
oFSANEKANdSfflCUMENTS DEPT.
FEB - 6 2001
BOARD OF SUPERVISORS
BUDGET ANALYST
1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642
FAX (415) 252-0461
SAN FRANCISCO
PUBLIC LIBRARY
February 1, 2001
TO: ^Finance Committee
FROM: ; Budget Analyst
SUBJECT: February 7, 2001 Finance Committee Meeting
Item 1 - File 00-2053
Department:
Item:
Description:
Mayor's Office of Public Finance
Motion awarding bonds and fixing definitive interest
rates for $17,060,000 General Obligation Bonds (Golden
Gate Park Improvements, 1992), Series 2001A;
$14,060,000 General Obligation Bonds (Neighborhood
Recreation and Park Facilities Improvement Bonds,
2000), Series 2001B.
On October 10, 2000, the Board of Supervisors approved a
resolution authorizing and directing the sale of up to
$17,060,000 in General Obligation Bonds (File No. 00-
1613, Golden Gate Park Improvements, 1992) to fund the
construction and/or reconstruction of Golden Gate Park's
utilities and infrastructure. Additionally, on October 10,
2000, the Board of Supervisors approved a separate
resolution authorizing and directing the sale of up to
$14,060,000 in additional General Obligation Bonds (File
No. 00-1612, Neighborhood Recreation and Park Faculties
Improvement Bonds, 2000) to provide for the acquisition,
construction and/or reconstruction of neighborhood
recreation and park facilities and properties.
Memo to Finance and Labor Committee
February 7, 2001 Finance Committee Meeting
Comments:
1. Ms. Karen Ribble of the Mayor's Office of Public
Finance advises that the bids for the proposed sale of
$31,120,000 in General Obligation bonds are scheduled to
be opened at 8:00 a.m. on February 7, 2001. According to
Ms. Ribble, unless all of the bids are rejected, the Finance
Committee will be asked to award the bonds to the bidder
whose bid represents the lowest true interest cost to the
City. Ms. Ribble reports that the Mayor's Office of Public
Finance will submit an Amendment of the Whole to the
Finance Committee's scheduled meeting at 10:00 a.m. on
February 7, 2001, which will list the winning bidder, the
other bidders and the interest rate that each bidder
offered to the City. Additionally, at the February 7, 2001,
Finance Committee meeting, the Mayor's Office of Public
Finance will provide the debt service payment schedule,
including the bond maturity dates, principal amounts and
interest rates.
2. The expenditure of bond proceeds will be subject to
appropriation approval by the Mayor and the Board of
Supervisors. According to Ms. Ribble, a supplemental
appropriation for expenditure of such bond proceeds is
expected to be submitted to the Board of Supervisors in
mid-February of 2001.
Recommendation:
Approve a motion awarding the subject bonds to the low
bidder, which represents the lowest true interest cost to
the City.
BOARD OF SUPERVISORS
BUDGET ANALYST
■2
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
Item 2 -File 01-0039
Department:
Item:
Lessor:
Lessee:
Term of Lease:
Right of Renewal:
Description:
Airport
Resolution approving Lease Modification No. 3 for Lease
No. 73-0066 between United Airlines, Inc. and the City,
acting by and through its Airport Commission.
City and County of San Francisco
United Airlines, Inc.
The subject lease was first approved in 1973 for an initial
20-year term, to expire in 1993, with two 10-year options at
the discretion of the lessee.
As noted above, the 20-year lease provided for two 10-year
extensions at the discretion of the lessee, for a total lease
period of up to 40 years. In 1993, United Airlines exercised
its first 10-year extension, which is due to expire in 2003.
On December 5, 2000 the Airport Commission approved
Modification No. 3 of Lease 73-0066 between the Airport
and United Airlines, Inc. Under lease 73-0066, United
Airlines currently occupies 129.75 acres of land used by
United Airlines for employee parking and its Maintenance
Operations Center (MOC) for aircraft maintenance. The
subject lease was originally approved in 1973 for an initial
term of 20 years, with two 10-year extension options at the
discretion of the lessee. According to Ms. Dorothy Schimke
of the Airport, in 1993 United Airlines exercised its first
ten-year option, which is due to expire on June 30, 2003.
The property leased by United Airlines is located at the
intersection of San Bruno Avenue and the Bayshore
Freeway.
The Airport is currently developing a Multi-Modal
Transportation Center, which includes, among other
elements, expansion of short-term Parking Lot DD, which
is adjacent to the property leased by United Airlines, and
the extension of the AirTrain (the Airport light rail system)
to the Multi-Modal Transportation Center and Parking Lot
DD (see Attachment, provided by the Airport, for a
description of these projects). According to Ms. Schimke,
Parking Lot DD currently consists of Airport employee and
BOARD OF SUPERVISORS
BUDGET ANALYST
3
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
Airport tenant employee parking. Ms. Schimke advises that
Parking Lot DD will be expanded and initially used for
additional employee parking, and upon completion of the
Multi-Modal Transportation Center, the expanded portion
of Parking Lot DD would be converted for long-term public
parking. Ms. Schimke advises that in order for the Airport
to complete such an expansion, the Airport needs access to
Parking Lot DD through a portion of the property currently
leased by United Airlines. Under the proposed Modification
No. 3 to Lease 73-0066, United Airlines has agreed to
relinquish to the Airport 0.74 acres of property. In return,
the Airport has agreed to provide United Airlines with
additional space of up to 2.61 acres for employee parking,
as discussed below.
The proposed transfer of acreage under the subject lease
Modification No. 3 would take place in the two following
phases:
(1) Ms. Schimke reports that on December 1, 2000, United
Airlines relinquished 0.74 of its total 129.75 in leased
property back to the Airport, leaving 129.01 acres under
the subject lease with United Airlines (see Comment No.
2).
(2) In exchange for relinquishing the 0.74 acres discussed
above, the Airport agreed to provide United with 150
additional parking spaces for United Airlines employees
that will be added to the lease at a future date, totaling
a maximum of 2.61 acres. However, Ms. Schimke
advises that the amended lease with the Airport will not
include the additional acreage until the Airport
completes the Multi-Modal Transportation Center and
the AirTrain, in approximately four to six years, as
explained in the Attachment to this report. During the
interim period, between the time that United Airlines
relinquished 0.74 acres of space on December 1, 2000
and the completion of the Multi-Modal Transportation
Center and the AirTrain Extension, the Airport has
granted United .Airlines a month-to-month permit,
effective December 1, 2000, for approximately 2.61 acres
to accommodate the additional employee parking.
Because the guideway for the AirTrain will require use
of part of the 2.61 acres, the Airport will not be able to
determine the exact amount of additional space that will
BOARD OF SUPERVISORS
BUDGET ANALYST
4
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
Rent paid by
United Airlines
to the Airport:
be added to tbe existing lease until the Multi-Modal
Transportation Center and the AirTrain are completed.
Therefore, proposed lease Modification No. 3 states that
the Airport and United Airlines agree to expand the
existing lease "after the Multi-Modal Transportation
Center and the AirTrain Extension are completely
designed and constructed... without the requirement of
formal amendment to the Lease or the approval of any
party... as to the dimensions and configuration of such
space."
Rent for the additional space to be charged by the Airport
to United Airlines will be at the same rate of $35,879.50
per acre charged for the existing lease, both when the space
is under permit and after it is added to the lease. The rate
of $35,879.50 first became effective in 1998, according to
Ms. Schimke.
Permit:
Ms. Schimke advises that when the first 10-year lease
extension with United Airlines was negotiated in 1993,
United Airlines and the Airport agreed to an annual rent of
$32,617.73 per acre for the first five years of the 10-year
extension, with one increase of $3,261.77 to an annual rent
of $35,879.50, effective July 1, 1998, for the remaining five
years of the 10-year extension, expiring on June 30, 2003.
Therefore, during the first 10-year extension between 1993
and 2003, the rent charged to United Airlines will have
increased by only approximately 10 percent, or by
approximately an average of one percent per year.
Under the proposed lease Modification No. 3, the exchange
in space would result in a maximum net increase of 1.87
acres used by United Airlines in this location (the 2.61
acres in new parking for United Airlines employees, less
the 0.74 acres relinquished back from United Airlines to
the Airport).
According to Ms. Schimke, the month-to-month permit
granted to United Airlines for the 2.61 acres allows the
Airport to modify or terminate the permit with 30-days
notice. Ms. Schimke advises that since the Airport must use
portions of the 2.61 acres under permit to United Airlines
for construction of the AirTrain extension, the Airport will
BOARD OF SUPERVISORS
BUDGET ANALYST
5
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
Compliance with
City Laws:
Comments:
reduce the number of acres provided to United Airlines
under permit as needed.
In addition, the proposed lease Modification No. 3 would
update the existing lease to reflect changes to the
Administrative Code and other City requirements, such as
provisions requiring compliance with the ban on tropical
hardwoods and virgin redwood, the MacBride Principles
related to employment inequity in Northern Ireland, the
Non-Discrimination in City Contracts and Equal Benefits
Ordinance, and the Minimum Compensation Ordinance.
1. As previously noted, the proposed lease modification
would ultimately result in a maximum net increase of 1.87
acres of space for United Airlines. The net rent increase
that the Airport would receive annually from United
Airlines is $67,095 per year, as shown in the table below.
However, the increased acreage to be added to the lease
will most likely be less than the estimated 1.87 acres since
the parking parcel now under permit will be reduced by
AirTrain construction as described above. Ms. Schimke
advises that the Airport will not add more than 2.61 acres
to the lease with United Airlines. The estimated net
increased rent of $67,095 to be paid by United to the
Airport is shown in the table below. The net increased rent
applies immediately to the estimated 2.61 acres provided to
United Airlines under a month-to-month permit effective
December 1, 2000, as well as to the final acreage after it is
incorporated into the existing lease. As stated previously,
Ms. Schimke reports that the Airport expects to complete
the Multi-Modal Transportation Center and the AirTrain
Extension in approximately four to six years, as stated in
the Attachment, provided by the Airport.
BOARD OF SUPERVISORS
BUDGET ANALYST
6
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
Annual Cost
per Acre
Total
Acres
Annual
Airport Revenues
Existing Lease
$35,879.50
129.75
4,655,365
Space relinquished by
United Air Lines to
the Airport
$35,879.50
(0.74)
(26,550)
Estimated additional space
to be leased by
United Airlines
$35,879.50
2.61
93,645
New Total
131.62
$4,722,460
Net Increase
1.87
$67,095
2. As stated previously, Ms. Schimke advises that on
December 1, 2000, United Airlines relinquished 0.74 acres
of space leased under the existing contract. In addition, the
Airport issued to United Airlines a permit, effective
December 1, 2000, to use an additional 2.61 acres for
employee parking, at which point United Airlines began
paying additional rent to the Airport based upon the
additional 2.61 acres. Therefore, the Budget Analyst
recommends that the subject resolution be amended to
provide for retroactive authorization. Ms. Schimke advises
that the permit to United for use of the 2.61 acres will be
terminated when the space is formally incorporated into
the existing lease.
3. As noted above, United Airlines will be charged rent for
the additional 2.61 acres at the same rate of $35,879.50 per
acre charged for the existing lease both when the space is
under permit and after it is added to the lease. Ms.
Schimke advises that the rate of $35,879.50 first became
effective July 1, 1998. The Budget Analyst notes that not
only has this rent of $35,879.50 per acre not been increased
since July 1, 1998, or for 2.5 years, but additionally, over
the 10-year lease extension, which expires June 30, 2003,
the rental increases to United Airlines in total have
averaged approximately one percent per year over 10 years,
or a total increase of $3,261.77, which adjusted the 1993
rent of $32,617.73 per acre to the current rent of $35,879.50
per acre.
BOARD OF SUPERVISORS
BUDGET ANALYST
fid fjt> revised 2/2/01
Item 2 - File 01-0039
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
Had this rent amount been adjusted upward according to
the total 11.24 percent increase in the Consumer Price
Index (CPI) between July 1, 1998 and January 2001, the
rent would have increased by $4,302.86 to an annual rent
of $39,912.35 per acre. Furthermore, the Budget Analyst
questions why the Airport does not require that United
Airlines pay the Airport an adjusted rent based on current
fair market rent for the net additional 1.87 acres to be used
by United Airlines (the 2.61 acres in new employee parking
for United Airlines, less the 0.74 acres relinquished back by
United Airlines to the Airport).
According to Ms. Schimke, the Airport agreed to the
proposed exchange of property with United Airlines and the
rental rate of $35,879.50 because the 0.74 acres United
Airlines has relinquished to the Airport is critical to the
completion of the AirTrain Extension and the Multi Modal
Center. The Budget Analyst notes, however, that the net
additional 1.87 acres provided to United Airlines for
, employee parking is apparently important to United
Airlines since United Airlines has requested the additional
land from the Airport. Therefore, the Budget Analyst
questions why the Airport does not require United Airlines
to pay the current fair market value for the additional land
that United will receive and why the rent being charged to
United Airlines has only been increased by an average of
one percent annually over the 10-year lease extension
period, which expires on June 30, 2003.
4. Ms. Schimke also states that the original 1973 lease with
United Airlines contains no provisions for annual
adjustments in rent during the initial 20-year term of the
lease, or during each of the subsequent two 10-year
extension periods. As discussed in Comment No. 3 above,
the existing lease provides that before each of the 10-year
extensions, the Airport and United Airlines will negotiate a
revised rent based upon Airport appraisals of the land's fair
market value at that time.
5. In response to the Budget Analyst's report, Ms. Schimke
advises that the Airport has negotiated the proposed lease
Modification No. 3 to accommodate the Airport. The Airport
went to United Airlines with the request for the Airport to
take back from United Airlines 0.74 acres of property to
which United had absolute rights under its long-term lease,
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
according to Ms. Schimke. The Airport's providing of up to
2.61 acres of Airport property to United Airlines, which
would enable United Airlines to provide its employees an
additional 150 parking spaces at the same rate of the
existing lease, was the 'price' for United Airline's
agreement to relinquish the 0.74 acres back to the Airport,
according to Ms. Schimke. Ms. Schimke states that the
Airport was not in a bargaining position to demand pricing
concessions from United as part of this deal. Ms. Schimke
reiterates that the 0.74 acres that the Airport will obtain
from United Airlines is necessary for the completion of the
Airport's Multi-Modal Transportation Center and AirTrain
extension (light rail system). In addition to the important
public policy goals of the Multi-Modal Transportation
Center, according to Ms. Schimke, the Parking Lot DD
portion of the project (see Attachment) has significant
revenue implications. Ms. Schimke anticipates that the
expansion of Parking Lot DD (the expansion will initially
be used for Airport employee parking and Airport tenant
employee parking, and eventually for public long-term
parking) allowed by the recapture of the 0.74 acres from
United Airlines will generate additional parking revenues
to the Airport conservatively estimated at $1,017,600 for
the first full year of operation, rising to approximately $3
million per year when the lot reaches capacity. Ms.
Schimke advises that these parking revenues will increase
significantly once the lot converts the Airport employee and
Airport tenant employee parking to public long-term
parking when the Multi-Modal Transportation Center is
completed.
6. Under the terms of the lease, not until the current 10-
year lease extension expires on June 30, 2003 will the
Airport, in conjunction with the Department of Real
Estate, appraise the value of the land and negotiate with
United Airlines a revised rent based upon the land's fair
market value at that time, as of July 1, 2003.
7. As previously noted, in 1993, under the first 10-year
extension, the Airport and United Airlines negotiated an
adjusted rent for this first 10-year extension, effective July
1, 1993, to increase the annual rent by $3,261.77, from
$32,617.73 per acre to $35,879.50 per acre annually,
effective July 1, 1998. This one and only rent increase
represents an average increase of only one percent
BOARD OF SUPERVISORS
BUDGET ANALYST
9
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
annually, or a total increase of 10 percent over the 10-year
lease extension. This mid-term adjustment was not
intended to reflect fair market value at mid-term, according
to Ms. Schimke. While the Budget Analyst acknowledges
that the 1973 original lease contained no provisions for
annual rent adjustments, nothing precludes the Airport
from negotiating a rent adjustment at this time, since the
Airport is requesting approval from the Board of
Supervisors of a proposed new lease Modification No. 3,
which would provide United Airlines with 1.87 additional
acres of Airport property.
Recommendations: 1. Amend the proposed resolution to provide for retroactive
authorization, in accordance with Comment No. 2 above.
2. Approval of the proposed resolution, as amended, is a
policy matter for the Board of Supervisors since under the
proposed lease Modification No. 3, the Airport will not
receive current fair market value until July 1, 2003 and, as
the lease presently states, the Airport does not require
United Airlines to pay annual rent adjustments based on
annual percentage increases in the Consumer Price Index
(CPI) over the entire potential 40-year term of this lease.
BOARD OF SUPERVISORS
BUDGET ANALYST
10
Attachment
Fa^e 1 ot 2
AIRPORT COMMISSION
SAN FRANCISCO INTERNATIONAL AIRPORT
CITY AND COUNTY OF SAN FRANCISCO
INTEROFFICE MEMORANDUM
TO: Harvey Rose DATE: January 24, 2001
Budget Analyst
FROM: Bob Rhoades (C~*
Deputy Airport Director, Business
SUBJECT: Lot DD Development - MultiModal Transportation Center
LotDD consists of a 3,218 space parking garage for Airport and tenant employees under Airport
control. It also contains a secure 1,190 space, payed parking lot under long-term lease through
year 2013 to United Airlines ('UA") for UA employee parking. Access to the employee parking
garage is by way of a signalized entry/exit from South Airport Boulevard. Access to the UA
employee parking area is from a separate signalized entry/exit from South Airport Boulevard,
with an additional (stop sign controlled) exit onto westbound San Bruno Avenue. Shuttle buses
transport employees to and from other Airport destinations.
The Airport intends to improve Lot DD as part of a Multi -Modal Transportation Center
("MMTC") development. Under the "Transit First Policy" adopted by the Airport Commission
in 1996, the Airport is cornmitted to the development of a ground transportation system which
gives priority to alternate transit modes. As part of this commitment, the development of the
MMTC at Lot DD would provide a consolidated transportation connection for long-term airport
parking, buses, and bicyclists, with access to the terminal complex. The MMTC would achieve a
number of transit first objectives, such as: 1) reduce vehicular travel to and congestion on the
passenger terminal roadways by providing direct access Yia AirTrain for remote long-term
parking sites; 2) encourage use of public transit by providing a direct connection between a new
SamTrans stop and AirTrain; 3) encourage bicycle commuting by providing an extension of the
Bay Trail, and new bicycle parking facilities with direct access to the terminal complex via
AirTrain.
Lot DD improvements will involve an extension of the AirTrain System (the Airport light rail
system); two MMTC AirTrain Stations; construction of a link of the San Francisco Bay Trail;
and expansion of long-term parking facilities. The Lot DD improvements are broken into two
phases for implementation.
Phase I improvements include: paving an unimproved portion of the lot to add approximately
1,600 additional parking spaces to initially be used by employees; signalization improvements at
the intersections of South Airport Boulevard and the J-380 off and on-ramps; construction of the
Bay Trail link through Lot DD; and relocation of the parking lot exit onto San Bruno Avenue. A
contract is currently underway to make the first phase improvements.
11
'■".' Attachment
'r' ;.- -., Vape 2 of 2
Harvey Rose
January 24. 2001
Page 2
Phase II improvements include: the extension of the AirTrain System; constructiou of a second
parking structure; and the conversion of the employee parking lot and structures into lonp-term
parking facilities.
The only viable vehicular access to the new parking area being developed is through the United
Airlines' secure leasehold area. Without such access, the new surface parking area being
developed in Phase I would be unusable, making less long-term parking available in the future.
To obtain UA agreement to bisect their leasehold the Airport agreed to increase the UA
leasehold to accommodate 150 additional parking spaces and to retain the access onto Srin Bruno
Avenue for the UA employees.
Phase I of the project is now underway. The entire MMTC, including phase II improvements, is
expected to be complete within four to six years.
12
Memo to Finance and Labor Committee
February 7, 2001 Finance and Labor Committee Meeting
Item 3 - File 01-0052
Department:
Item:
Lessor:
Lessee:
Total Acreage and
Cost Per Month
Payable by United
Airlines, Inc. to the
Airport:
Purpose of Lease:
Amount Payable by
United to Airport:
Airport Commission
Resolution approving a new lease agreement for Plot 6
between United Airlines, Inc. (United) and the City and
County of San Francisco, acting by and through its
Airport Commission
City and County of San Francisco
United Airlines, Inc.
16.04 acres at a monthly rental rate of $132,054.65 for the
first and second years of the proposed lease
(approximately $8,232.83 per acre per month). For the
first and second years, annual rent would total
$1,584,655.76 ($98,794 per acre per year).
United will use the 16.04 acres for an air cargo facility,
administrative offices and employee parking.
$1,584,655.76 per year for the first and second year of the
lease. According to Ms. Dorothy Schimke of the Airport,
rent in the amount of $1,584,655.76 per year represents
the fair market value of the subject 16.04 acres on June 1,
1999, the retroactive effective date of the proposed lease.
Presently, United pays the Airport $508,353 under permit
for 19.35 acres (see Comment No. 2). The proposed lease
provides for annual increases in the rent based on
increases in the Consumer Price Index (CPI). According to
the proposed lease, the CPI adjustment would begin on
June 1, 2001. As stated in the Attachment provided by
the Airport, there will be no CPI adjustment between
June 1, 1999 and June 1, 2001. In the sixth year of the
proposed lease, the annual rental payment to the Airport
will be determined by a City reappraisal of the land to
reestablish the fair market value amount. Subsequent
annual increases in the rent will be made based on
increases in the CPI through the end of the lease.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance and Labor Committee
February 7, 2001 Finance and Labor Committee Meeting
Term of Lease:
Right of Renewal:
Maintenance and
Operations:
Description:
Retroactive to June 1, 1999 to June 30, 2011 (12 years
and one month)
Lessee bas no renewal rights.
The Lessee, United Airlines, Inc., pays for the costs of all
maintenance and operations.
The proposed resolution would authorize a new 12 year
and one month lease retroactive to June 1, 1999 of 16.04
acres of a newly configured Plot 6 to accommodate
United's air cargo facility, some administrative offices and
employee parking. The 16.04 acres of a newly configured
Plot 6 would constitute approximately 83 percent of the
19.35 acres of Plots 5 and 6 covered under a month-to-
month permit, cancelable on 30-day notice, since the
expiration of original leases in 1993. According to Ms.
Schimke, United occupied the 16.04 acres from 1993 until
June 1, 1999 on a permit basis, instead of under a lease,
pursuant to the following conditions contained in a
Memorandum of Understanding negotiated in the early
1990s between the Airport and United Airlines:
1) Upon termination of the leases of Plots 5 and 6
in 1993, the leases would be replaced in the interim
by month-to-month permits, for the same areas at
the same land rental rates as were then in effect,
until the land was required for the Airport's Master
Plan construction or the functions were
accommodated elsewhere;
2) The Airport would offer United a "standard
lease" for that portion of the site primarily
comprising Plot 6, for continued accommodation of
its air cargo facility, offices and related parking;
3) Rent under the interim permit(s) would remain
at the same rate as was in effect upon termination
of the Plots 5 and 6 leases, and would be adjusted
to fair market value at the time the new leases
were in place.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance and Labor Committee
February 7, 2001 Finance and Labor Committee Meeting
The-differeneesJbetween-the-proposed-lease-for-16T04-acres
of a newly configured Plot 6 and the existing month-to-
month permit for 19.35 acres of Plots 5 and 6 are (1) the
permit is cancelable upon 30-days notice, (2) the new-
lease adjusts the rents as described in Comment No. 2
below, (3) 1.43 acres have been added to result in a total
acreage of 16.04 acres for Plot 6, which originally totaled
14.61 acres, and (4) Plot 6 has been slightly reconfigured
due to the Airport's Master Plan construction program for
Boarding Area "G" and the Air Train (Airport Light Rail
System).
The proposed lease would reflect the City's
Administrative Code and other City requirements, such
as provisions requiring compliance with the ban on
tropical hardwoods and virgin redwood, the MacBride
Principles related to employment inequity in Northern
Ireland, the Non-Discrimination in City Contracts and
Equal Benefits Ordinance, and the Minimum
Compensation Ordinance.
Comments: 1. The Airport Commission adopted Resolution No. 00-
0464 on December 19, 2000, recommending the proposed
new lease to United retroactive to June 1, 1999. As shown
in the Attachment, the lease is retroactive to June 1, 1999
because in June of 1999, the Airport determined that the
Air Train required adjustments that would encroach upon
the eastern boundary of the new Plot 6. Finalization of
the Plot 6 lease was therefore put off until the Air Train
issues were settled and a legal description of the premises
could be accurately determined. Ms. Schimke reports that
because these adjustments were minimal, United agreed
to establishing an effective date of June 1, 1999 for the
proposed lease at the then market value rental rate. The
final configuration of the parcel incorporating the Air
Train land recapture was not defined and resolved
between the Airport and United until November of 2000.
2. According to Ms. Schimke, the proposed lease of 16.04
acres includes 14.61 acres of the old Plot 6 and 1.43 acres
of the old Plot 5. As previously noted, the annual rent for
the first and second year for the 16.04 acres would be
$1,584,655.76, a net annual increase of $1,076,302.76, or
an increase of approximately 211.7 percent, retroactive to
June 1, 1999, from the permit rent of $508,353 payable by
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance and Labor Committee
February 7, 2001 Finance and Labor Committee Meeting
United to the Airport forthe-19.35 acres of PlotsS and 6
covered under permit. The new proposed lease pertaining
to 16.04 acres would result in a reduction of 3.31 acres
being leased by the Airport to United. Ms. Schimke
reports that upon approval of the proposed lease by the
Board of Supervisors, United would pay retroactively to
the City $1,793,838, representing the difference in the
monthly rental income of $89,691.90 for the 20 month
period from June 1, 1999, the start of the proposed lease,
through January 31, 2001. The net increase in rent
payable by United to the Airport for the first two years of
the lease is calculated as follows:
Approximate Annual
Cost per Acre
Total Acres
Annual Airport
Revenues
Old permit: Plot 5
$42,000
4.071
$170,940
Plot 6
$22,082
15.28
$337,413
Subtotal for permit
19.35
$508,353
Proposed new lease for
new Plot 6 (includes a
majority of the acreage
of the old Plot 6 and a
small parcel of the old
Plot 5)
$98,794
16.04
$1,584,655.76
$1,076,302.76
3. The Budget Analyst notes that had the rent amount
for the second year of the proposed lease been adjusted
upward according to the 3.77 percent increase in the CPI
between June 1, 1999 and June 1, 2000, the rent would
have increased by approximately $59,742 to an annual
rent of approximately $1,644,398 instead of the proposed
annual rent of $1,584,655.76 for the first and second year
of the proposed lease.
4. Since the lease began on June 1, 1999, the proposed
resolution should be amended to provide for retroactive
authorization.
1 Under the proposed lease for the new Plot 6, United will lease 1.43 acres of the 4.07 acres of
Plot 5 that were under permit.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance and Labor Committee
February 7, 2001 Finance and Labor Committee Meeting
Recommendations: 1. Amend the proposed resolution to provide for
retroactive authorization, in accordance with Comment
No. 4 above.
2. Approval of the proposed resolution, as amended, is a
policy matter for the Board of Supervisors because there
will be no CPI adjustment for rent for the second year of
the proposed lease. Had the rent amount being charged by
the Airport to United Airlines for the second year of the
proposed lease been adjusted upward according to the
increase in the CPI, the rent payable by United to the
Airport would have increased by approximately $59,742
to an annual rent of $1,644,398, instead of the proposed
annual rent of $1,584,655.76 as noted in Comment No. 3.
BOARD OF SUPERVISORS
BUDGET ANALYST
i -i
Attachment
AIRPORT COMMISSION
SAN FRANCISCO INTERNATIONAL AIRPORT
CITY AND COUNTY OF SAN FRANCISCO
MEMORANDUM
TO: Harvey Rose DATE: January 25, 2001
Budget Analyst
FROM: BobRhoades ftL,
Deputy Airport Director, Business
SUBJECT: Plot 6 Lease - United Airlines
As discussed in the Budget Analyst's report, the subject lease comprises one element of a
complex series of land exchanges required to implement the Airport's Master Plan. The general
concept, negotiated in the early 1990's, provided for existing permits to remain in place, at then-
current rents, until the land was required for the Master Plan construction or the functions were
accommodated elsewhere. It was generally agreed that the Plot 6 lease would not be finalized
until the parcel reached its final configuration. It was anticipated thai the plot would reach its
final configuration when the Airport recaptured a parking parcel in the area now comprising a
portion of the new Boarding Area G apron.
The parking parcel was surrendered by United in June 1 999; however, at that time it became
apparent that the Air Train (Airport light rail system) guideway required adjustments that would
encroach upon the eastern boundary of Plot 6. The Plot 6 lease could not be absolutely finalized
until the guideway issues were settled and legal description of the premises could be written,
based upon formal survey. The issues were finally resolved in late 2000.
Because the guideway adjustments were rninimal, the parties agreed that, once approved by the
Board of Supervisors, the Plot 6 rent commencement would be retroactive to June 1, 1999. The
first CPI adjustment will occur in accordance with lease provisions, once the lease is actually in
place (after Board approval). The Base Index for CPI adjustments is defined as "the most recent
Consumer Price Index published immediately prior to the Commencement Date," or April 1999.
The Comparison Index for the first (June 2001) adjustment will be April 2001 , generating a two-
year value increase.
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
Item 4 -File 01-0047
Department:
Item:
Amount:
Source of Funds:
Term of Agreement:
Description:
Budget:
Police Department
Resolution authorizing the Chief of Police to execute an
agreement with the State of California in the amount of
$103,358 to obtain various training equipment.
$103,358
California Commission on Peace Officer Standards and
Training (POST)
July 1, 2000 through June 30, 2001 (see Comment No. 1)
Currently, the California Commission on Peace Officer
Standards and Training (POST) requires all California
Peace Officers to undergo a minimum of 24 hours of in-
service training every two years. Effective for Fiscal Year
2000 - 2001, POST added the additional requirement that
14 of the mandatory 24 hours of in-service training be in
particular skills, which include the use of force, vehicle
operation, and arrest and control skills (i.e., the ability to
physically subdue persons under arrest who are
uncooperative). In order to enable local law enforcement
jurisdictions to meet these requirements, POST has offered
to reimburse 23 law enforcement jurisdictions (see
Attachment I) throughout California for the acquisition of
the necessary training equipment.
The subject resolution would authorize the Chief of Police
to execute an agreement with the California Commission on
Peace Officer Standards and Training, in order for POST to
reimburse the Police Department $103,358 for the costs of
the training equipment needed by the Department for the
State-required training. The new equipment would be
utilized at the Police Academy.
$103,358. Attachment II, provided by the Police
Department, contains a detailed list of the equipment the
Police Department would acquire. Attachment III, provided
by the Police Department, contains explanations of the
equipment to be acquired.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
Comments:
Recommendation:
1. The proposed agreement states that the term of the
agreement would commence on July 1, 2000, or upon
delivery of an approved copy of the contract to POST.
Captain Dan Lawson of the Police Department states that
the Police Department would not transmit an executed copy
of the proposed agreement to POST until the Police
Department has obtained approval of this proposed
resolution from the Board of Supervisors.
2. The proposed agreement contains multiple
indemnification provisions. Ms. Margaret Baumgartner of
the City Attorney's Office states that she has reviewed the
subject proposed agreement, and that the indemnification
provisions contained therein are standard and pose no
unreasonable risk to the City.
3. According to Captain Lawson, after entering into the
proposed agreement, the San Francisco Police Academy
would be designated as a regional California Law
Enforcement Mini-Skills Academy by POST. The Police
Academy would then provide the State-required training to
its own uniformed personnel and to security personnel of
other jurisdictions, such as UCSF and San Francisco State
University, if sufficient training time is available.
According to Captain Lawson, POST would fully reimburse
the Police Department for all such costs the Police
Department incurs for providing the State-required
training.
Approve the proposed resolution.
BOARD OF SUPERVISORS
BUDGET ANALYST
Field Training Program
Attachment I
■rage 1 of 2
CA&FORNl&PQST^:
home / srreuAP- ~v,
CONTACT;
POST
916.227.3909
postmaster©
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POST Regional Skills Training (
Resource/Contact Pa|
October, 2000
[SKILLS CENTER CONTACT
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98-011-78 FATS & AMOS
813-532-3722
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Cpl Mike Camp
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93-01 1-AMOS
916-228-3859 p810-6696
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Gordon Clemmer
|Capl. Greg Kyritsis
98-011-97 FATS & AMOS
909-880-2622
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Steve Margetts
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|| Frank Ccna
[98-011-81 FATS 4 AMOS
530-842-83H1
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Greg Wagstaff
Li. Dave Babineau
98-01 1-96 AIS 4 I8IM
406-501-0960
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Attachment I
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Dennis Mwcilack |Tommy Garcia
[Ron Gannon
626-814-6579
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661-391.7500
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415-713-9932
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SELF-FUNDJOFAAC _ ([714-246-8057
Rodger B. Fluke, POST Webmaster
Copyright © 2000 by POST. All rlghu reserved.
Revised: 19 Oct 2000 14:04:59 -0700 .
2or'2
271/2001 121 1
Attachment II
CONTRACTOR: San Francisco Police Department
CONTRACTS: 00-011-36
12
EXHIBIT D
Equipment Acquisition and Budget Detail
Phase I
A) Acquisition cf the fallowing training equipment:
^Quantity
.-..■-".: •;'•':.■.- Itera'iH
. .'. - . f: Equipment ^; •.";;--•-• ":
1 Skid car platform
Laptop computer for presentations and support
a. Primarily for the Driving Simulator course;
b. Minimum specs: 400 mh, Pentium 2, 128 MB RAM, 10 GB
capacity hard drive, CD ROM w/ DVD, Active Matrix screen, must
be compatible w/LCD projector
Total:
$40,000
1
Car for above platform (new Ford Crown Victoria - same make as
typical patrol car)
$22,000
3
"Freddie" life-size training mannequins, plus related equipment and
supplies
510,089
3
"Redman" type training suits
$3,000
1
1000 Lumen or better LCD projector, RGB Ac Video
$5,000
$3,000
20 Training Handcuffs
$1,700
20 Straight Batons training type
$400
20 Side-handle Batons, Training Type
$400
Sufficient floor mats to facilitate "Freddie" Arrest and Control Techniques
$8,822
Red pistols, knives, shotguns
$1,070
Sub-Total
$95,481
TAX (8.25%)
$7877
TOTAL
S 103358
*Jf there are remaining funds, Contractor shall obtain approval from the Regional Skills
Project Coordinator, Forrest Billington, (916) 227-4895, to purchase other peripheral training
items as needed
Attachment III
Memorandum
San Francisco Police Department
Captain Daniel Lawson, #622
To: Captain Daniel Lawson, Training DivisiEftlicc Academy^* r ^ — B"^ D
_ D D
From: Lieutenant Richard Parry ,/T)ii5ln^Division n Q
Date: Thursday, February 01 , 200 1
Subject: Equipment Use For CPT Program
Issue:
Listed below are the proposed applications for the equipment being purchased under
POST contract 00-01 1-36 the Perishable Skills Training Program.
Discussion:
All of the equipment listed in the attached exhibit "D" will be utilized in this weekly
training program as prescribed by POST. The skid car platform and Crown Victoria
patrol vehicle will be utili2ed to supplement vehicle operations training in both our Basic
and our Advanced Courses. The remaining listed training equipment including
handcuffs, batons, red weapons, floor mats, Freddies and Redman suits will be used to
support the POST mandated Arrest and Control Techniques training and evaluation
portion of the program.
The laptop computer and LCD projector will be utilized to present POST power point
lesson plans in the Continuing Professional Training Program.
Recommendation:
N/A
20d
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
Item 5 - File 00-2187
Note: This item was continued by the Finance Committee at its meeting of
January 31, 2001.
Department:
Item:
Contract Term:
Description:
Department of Public Health (DPH)
Resolution authorizing the Director of Public Health and
the Purchaser to execute a contract between the City and
County of San Francisco and Health Advocates, LLP to
provide uncompensated care recovery services.
March 1, 2001 through December 31, 2002 (approximately
22 months).
Uncompensated care recovery services include the
assistance to complete Supplemental Security Income
(SSI) and Medi-Cal eligibility applications on behalf of
DPH patients, and representation and legal assistance for
patients in SSI fair hearings and appeals, for the purpose
of collecting unpaid inpatient hospital bills for DPH
services that are provided to indigent patients. The
proposed resolution would authorize DPH to enter into a
contract with Health Advocates, LLP (HA), a private
contractor, to provide an uncompensated care recovery
program.
The DPH issued a Request for Proposals (RFP) in
September of 2000, and received the following two bids in
response to its RFP: (1) Health Advocates, LLP for
$1,180,000 each contract year and, (2) Paralign for
$1,090,000 each contract year. Attachment I, provided by
Ms. Monique Zmuda from the DPH, indicates that the bid
amounts were based on estimated annual revenue of
$6,000,000, which has since been reduced to $5,800,000.
Ms. Zmuda further advises in Attachment I that HA
reduced its bid by $90,000 to $1,090,000 each contract
year, the same amount bid by Paralign, after negotiations
with the DPH. According to Ms. Zmuda, HA was selected
based on the DPH's evaluation of the established criteria,
which awards points based on recent relevant experience,
the scope of work to be performed, the quality of past
projects and cost. Ms. Zmuda states that the DPH also
required the bidder to provide these services by multi-
lingual and multi-cultural staff. Ms. Zmuda further
states that the DPH also built in additional services into
the scope of work, including following up on treatment
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
authorization requests, and incurring the cost of re-billing
for services provided, once the clients have been made
eligible for Medi-Cal.
According to Ms. Zmuda, the DPH has contracted out
uncompensated care recovery services since 1988 to help
supplement in-house efforts on uncompensated care
recovery services. Ms. Zmuda advises that San Francisco
General Hospital (SFGH) has an internal staff of ten
Hospital Eligibility Workers to assist SFGH patients in
identifying financial resources to pay for inpatient
hospitalization for which no source of funding is currently
available. Eligibility determination, which is provided by
DPH personnel, and authorized by the City's Department
of Human Services, typically includes assistance in
applying for Medi-Cal or SSI, and making appropriate
third-party claims. The contractor will handle those cases
which the internal DPH eligibility workers have deemed
"unreimburseable," usually involving former inpatients
who have been discharged form SFGH. These
uncompensated care services include identifying financial
resources to pay for the care provided, field work on
behalf of indigent patients, such as visits to homeless
shelters; assistance in obtaining further medical
treatments or evaluations, as necessary; efforts to locate
former inpatients whose addresses are not known, and
patient advocacy and representation in appealing denials
of benefits to administrative agencies.
Based on a prior year actual recovery from contracting
this service, Ms. Zmuda advises that the DPH was paid
approximately $5,800,000 a year, or approximately
$483,333 a month from making indigent patients eligible
for third-party payment. The DPH anticipates the same
level of annual reimbursement to be made under the
proposed contract period.
The proposed subject contract would only pay the
contractor a percentage of the revenues actually collected,
on behalf of the City, according to the following schedule:
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
Cumulative Revenues Generated Contingency Fees
Each Contract Year Paid to the Contractor
$0 to$1.999.999 NET 20 percent
$2 million to$2,999,999 NET 18 percent
$3 million and above NET 16 percent
"NET' is used to describe the actual cash received by
SFGH as opposed to any unique program determinations
of allowable amounts and the deduction of contractual
allowances. In accordance with the contract provisions,
HA would be paid a varying fee by the DPH based on the
percentage of the revenues collected by the contractor.
Comments: 1. As indicated above, the proposed contract would
extend for the 22-month period from March 1, 2001
through December 31, 2002. According to Ms. Zmuda,
DPH expects to realize approximately $10,633,333 in
additional revenues under this 22-month contract, with
the contractor to be paid an estimated $1,884,667, or an
overall average of 17.72 percent of the revenue collected,
for net estimated revenues to the City of $8,748,667 for
the term of the 22-month contract. Attachment II,
provided by DPH, highlights the estimated revenue and
contingency fees associated with the subject contract
agreement. As mentioned above, the actual contingency
fees paid to HA will depend on the revenue realized
during the contract period.
2. The proposed subject resolution authorizes the
Director of Public Health and the Purchaser to make
amendments to the subject contract, if needed. According
to Ms. Zmuda, this is a standard provision in all of the
DPH's contracts, which allows the DPH to make minor
changes, such as including an additional scope of work
requirement or extending a contract for a few months
while an RFP is in process, but not change the intent of
the original contract.
3. On January 31, 2000 the Human Rights Commission
(HRC) issued a report to the Finance Committee
pertaining to the Department of Public Health (DPH)
Request for Proposal Process #17-2000: Uncompensated
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
Care Recovery Services (Attachment III). The HRC
concluded:
"There was a general consensus among the panelists that
Health Advocates submitted a superior proposal. In
addition, DPH conducted a well organized and
documented RFP process. However, ... it is extremely
important to avoid even the appearance of bias in these
procurements. In this regard, HRC believes that there
were several flaws in the process.
First, none of the panel members should have had any
recent dealings with either proposer. Second, the partial
reference checks of only one proposer should not have
been given to the panelists. If reference checks were
shared with the panelists at all, then full and complete
checks for both the panelists should have been included.
Finally, the letter of recommendation from the domestic
partner of the CFO (of the DPH's Community Health
Network) should not have been included in Health
Advocate's proposal. Whether or not Health Advocates
knew of the relationship, the sender must certainly have
been aware of the conflict of interest and should have
refrained.
There is no evidence to show that these flaws influenced
the outcome of the evaluation process in any significant
way. However, HRC believes that the most equitable
resolution to this RFP would be to convene another panel
to reassess the two previously submitted proposals,
removing the letter from the CFO's domestic partner from
that of Health Advocates."
4. The Budget Analyst requested a written response from
Ms. Zmuda pertaining to the HRC report dated January
31, 2000. As of the writing of this report, Ms. Zmuda has
not yet responded to the Budget Analyst.
Recommendation: Approval of the proposed resolution is a policy matter for
the Board of Supervisors.
BOARD OF SUPERVISORS
BUDGET ANALYST
DEC-20-2000 14: IB FROM DPH-CFO
City and County of San Francisco
Date:
Memo To:
From:
Re:
to mRUEY rose Attachment I
Department of Public Health
Mitchell H. Katz, M.D.
Director of Health
December 20, 2000
Harvey Rose
Budget Analyst
Monique Zmuda fH
Chief Financial Officer
Proposed Contract with Health Advocates, LLP
This memo is in response to questions regarding the proposed contract with Health
Advocates LLP, to provide uncompensated care recovery reimbursement services for the
Community Health Network of the Department of Public Health.
The following summarizes the RFP Process:
Date RFP Issued:
Selection Made:
September 29, 2000
November 21, 2000
Number of Bidders: 2- Both profit-making private firms
Bid Amounts: Both firms were requested to bid on services for revenue recovery of $6
million annually. Although the bid from Health Advocates was 590,000 higher than the
other qualified bidder, Health Advocates had a higher score, and thus was awarded the
contract. In contact negotiations with Health Advocates, the Department was successful
in securing a reduction equivalent to 590,000 in the contract rate for the services.
(415) 554-2600
101 Grove Street
Fllininn md Path
San Francisco, CA 94102
DEC-20-2000 14: 18 FROM DPH-CFQ
TO HftRUEY ROSE a i- •. v
Attachment II
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City and County of San Francisco
Willie Lewis Brown, Jr.
Mayor
Attachment III
Human Rights Commission
Contract Compliance
Dispute Resolution/Fair Housing
Minority/Women/Local Business Enterprise
Lesbian Gay Bisexual Transgender & HIV Discrimination
Virginia M. Harmon
Interim Director
MEMORANDUM
Date: January 31st, 2001
To: Honorable Members of the Finance Committee
Through: Virginia Harmon
Interim Director, HRC
From: Diana Rathbone
Senior Contract Compliance Officer, HRC
Subject: Department of Public Health (DPH) Request for Proposal # 17-2000:
Uncompensated Care Recovery Services
At its regular meeting on January 17th, 2001, the Finance Committee of the Board of Supervisors
asked the Human Rights Commission to look into the selection process for the above referenced
contract and to ensure its impartiality.
This report is a response to that request. It includes a brief contract history, followed by a
summary of normal selection procedures for professional services contracts. These procedures
are then compared with those on this contract, with special reference to potential problem areas
raised at the Finance Committee meeting.
BACKGROUND
In September, 2000, DPH issued a Request for Proposals (RFP) for uncompensated care
recovery services. The purpose of this RFP was to hire a contractor to assist DPH in collecting
unpaid inpatient hospital bills for services that are provided to indigent patients. Such services
include, for example, completing Supplemental Security Income (SSI) and Medi-Cal eligibility
applications on behalf of patients, and representing them at SSI fair hearings and appeals.
Two proposals were received in response to the RFP, one from the incumbent, Paralign, and the
other from a new contractor called Health Advocates.
The proposals were rated by an expert panel and Health Advocates received the highest score.
When Paralign was notified that it had not been selected, it filed an appeal with DPH, which
DPH overruled. The Health Commission then voted to award the contract to Health Advocates
at its meeting on December 12th, 2000 and, because the contract involves incoming revenues to
25 Van Ness Avenue
Suite 800
San Francisco
California 94102-6033
TEL (415) 252-2500
FAX (415) 431-5764
TDD (415) 252-2550
http://www.sfhumanrights.org
&
Attachment III
Page 2 of 6
Finance Committee, Board of Supervisors
January 31"\ 2001
the City in excess of $1 million, it was forwarded to the Board of Supervisors Finance
Committee for its approval.
Paralign has filed an application for a temporary restraining order and a motion for a preliminary
injunction in the United States District Court for Northern California. The court has agreed to
continue the date of this motion until the Board of Supervisors awards the contract.
CONTRACT SELECTION PROCEDURES
The City has two distinct processes for the selection of contractors. They are variously described
in Chapters 6 and 12D.A of the San Francisco Administrative Code.
Construction Contracts. Construction contracts are put out to bid and the contract is awarded
to the lowest responsible and responsive bidder.
Professional Services Contracts. Professional services contracts are awarded using an RFP
process. The aim of the RFP is to select the company which will provide the highest level of
service (i.e., which proposer will design the most beautiful and functional hospital; which
proposer will provide accounting services in the most efficient and timely manner; which
proposer will create the most user friendly and reliable computer software program).
On many professional services contracts, particularly, architecture and engineering contracts, the
quality of the work being proposed is the over-riding factor and, in those cases, fees are
submitted, if they are submitted at all, in a separate, sealed envelope. In this way, the department
has a starting point for cost negotiations with the successful contractor, but the panel is not
influenced by questions of money.
On other contracts, as in the one before you, price may be an issue, and in these cases, it will be
evaluated along with all other aspects of the proposal. However, price will never be the
determining factor. If it were the determining factor, there would be no need to issue an RFP and
the contract would be awarded to the lowest bidder, as if it were a construction contract.
Although every effort is made to keep the RFP process as objective as possible, it is, compared
to the bidding process used for construction contracts, a more subjective approach. Therefore,
every effort has to be made to document and to ensure the fairness of the selection procedures at
each stage of the process, and to eliminate any possible suggestion of bias.
A TYPICAL SELECTION PROCESS.
RFP. The first step is for the department to issue an RFP. It should spell out exactly what the
department is looking for, including clearly defined minimum qualifications and the types of
information that should be included in the proposal. The RFP should also contain specific
evaluation criteria, with predetermined points assigned to each criteria, so that proposers will
understand how they are going to be scored.
OS
Attachment III
^age j ot fa
Finance Committee, Board of Supervisors
January 31", 2001
On a typical contract, if points are assigned to the price, these points will be assessed using a
predetermined formula based on the lowest price.
Preproposal Meeting and Questions. A pre-proposal meeting is held to answer the questions
of potential proposers. Minutes are taken and are then distributed to all potential proposers, both
those present at the meeting and those who have expressed interest in the RFP but who are not at
the meeting. In addition, answers to any phone questions provided by the department to any
interested proposer are provided by mail to all interested proposers.
Panel. The department selects a panel, normally composed of three or more members, to
evaluate the proposals. Panelists must possess appropriate expertise to evaluate the contract in
question and the panel as a whole must reflect the ethnic and gender diversity of San Francisco.
HRC strongly recommends that at least one panel member be recruited from outside the
department, and one from outside the City, to ensure impartiality. However, this is not a
requirement.
No panel members should be involved in the preparation of the RFP in question, or in the
planned future management of the contract. Additionally, no panel members should have a
previous professional or personal relationship with any of the proposers.
Panel Orientation. The panel will normally receive an orientation prior to commencing its
work. The point of the orientation is to answer any questions the panelists may have, and to
provide rules to ensure an equitable process. For example, it is inappropriate for any panel
member to attempt to influence the score of another panel member, to indicate by body language
during an oral interview an opinion of the presentation in progress, to score a written proposal on
anything other than the information contained within the proposal, or to give an oral interview of
one hour, with one set of questions, to one proposer, and ten minutes, with a completely different
set of questions, to another.
Scoring Written Proposals.
Once the proposals have been received, a copy of each one is sent to the panelists, after which, a
meeting is normally convened to score the written proposals. The HRC's Rules and Regulations,
pursuant to Chapter 12.D.A of the San Francisco Administrative Code (the Minority, Woman
and Locally Owned Business (M/W/LBE) Ordinance) encourage departments to prohibit any
discussion at all among panelists, other than for points of clarification and follow up, allowing
each panelist to score each proposal and interview according to his or her individual assessment.
However, this is not a requirement.
Oral Interviews.
Once the proposals have been evaluated, the department usually creates a shortlist of the top
scorers, and these firms are then invited to an oral interview in front of the same panelists. All
proposers should be asked the same questions, each interview should be scored according to
Attachment III
Page A of 6
Finance Committee, Board of Supervisors
January 31 ", 2001
predetermined evaluation criteria and points and all interviews should take the same amount of
time. Again, HRC discourages discussion among the panelists, other than for points of
clarification and follow up, but this is not a requirement.
Negotiations and Contract Award.
At the conclusion of the selection process, the department enters into discussions with the firm
which submitted the highest rated proposal. At this point, everything in the proposal, including
the price, is open to negotiation.
Once those negotiations are successfully completed, the contract is ready for award. If the
negotiations break down, the department will open negotiations with the second highest scorer,
and so on, until it has a successful contractor.
QUESTIONS ABOUT THE PROCESS USED IN THIS RFP
General.
DPH, for the most part, followed the procedures outlined above. It is perhaps worth noting that,
during the evaluation of the written proposals, the panel was allowed to discuss the responses to
each of the evaluation criteria, prior to scoring that criteria according to the predetermined
points. Notes were kept of these discussions, and these were later typed up and sent to each
panel member for review. While HRC prefers that no discussion take place, such a practice is
not prohibited, and there is nothing in either the notes or the scores to suggest anything other
than a fair, thoughtful and unbiased evaluation. To the contrary, panel members report that it
was an extremely formal selection process.
It is DPH's practice to assign the selection process to a contract administrator. The contract
manager, the person who will be in charge of the contract once it is awarded, is not involved in
the development of the RFP other than to advise on the selection of panel members and to be
present at the panel evaluations to answer technical questions.
DPH decided not to conduct oral interviews.
References. Paralign's proposal included very few letters of recommendation, in comparison
with that of Health Advocates. During the panel evaluation of the written proposals, the
contract manager asked the contract administrator if she could share the results of Paralign's
reference checks in an effort to bolster the information in Paralign's proposal. Permission was
granted. At that point, the contract manager had not completed Paralign's reference checks, and
had not started on those of Health Advocates.
The Paralign references were mixed, certainly more mixed than any letter a proposer would opt
to include in a proposal. On the other hand, all but one of the panel members, although they
remember the incident, do not feel that it effected their scoring one way or the other. They were
Attachment III
Page iot b
Finance Committee, Board of Supervisors
January 31", 2001
more influenced by the proposal itself. The other panel member felt it had increased an already
negative assessment of Paralign's performance under this criteria.
No information was given to the panel regarding the outcome of Health Advocate's references,
because they had not yet been checked.
Bias.
It is obviously extremely important that no panelists and no department staff involved in the RFP
process should have any investment in its outcome that could bias the proceedings. For example,
it is important in a contract such as this one that none of the panelists should have previously
worked with the incumbent. However, two of the five panelists have had ongoing professional
dealings with the incumbent in the performance of its current contract.
In addition, the contract manager, as well as her supervisor, the Chief Financial Officer (CFO) of
DPH's Community Health network, had an existing relationship with one or other of the
proposers. The CFO's domestic partner used to work for Health Advocates, and her letter of
recommendation was one of those included in Health Advocate's proposal. The CFO is also
close friends with several Paralign employees. For these reasons, when he was asked to serve on
the panel, the CFO recused himself. However, as the contract manager's supervisor, it was also
his job to review and sign off on all the RFP documents once the process was complete, the
highest scorer determined and the letters of notification ready to be issued. The CFO did not
recuse himself from this task and signed the document.
It seems clear that the CFO, in order to avoid even the appearance of bias, should have recused
himself from the entire process, including lending his signature to the final RFP approval.
However, because his role was so minor, and occurred post selection, it seems clear that his
signature could not have influenced the outcome of the process itself. Additionally, none of the
panel members knew the name of the CFO's domestic partner, and therefore could not have been
influenced by the presence of this letter in Health Advocate's proposal.
The contract manager is the second person with an apparent conflict of interest. She was hired in
July, 2000, two months before this RFP was issued, and part of her assignment was to work with
the incumbent in the execution of its current contract. In addition, in a previous employment,
she had hired Health Advocates to perform similar services to those requested in this RFP.
Lastly, although she was not on the panel, she selected all but one of the panel members and she
was present while the proposals were being scored as a technical advisor. It was in this role that
she shared the partial references with the panel members.
The panel members say that the contract administrator played the most important role during
their deliberations, giving them all of their instructions. They agree that the contract manager sat
silently, apart from reading the references and answering one or two questions. There is
therefore no evidence, except for reading the references, that she influenced their discussions in
any way.
Attachment III
Page 6 of 6
Finance Committee, Board of Supervisors
January 31", 2001
Bilingual Staff. This is not really an issue of procedure. The RFP required as a minimum
qualification that proposers must be able to "demonstrate that they have adequate staff "on
board" as of the time of its bid, who are bilingual," that they have access to interpreters, and that
"both on and off site staff demographics reflect the ethnically diverse patient population served
by DPH." Panel members and DPH staff are satisfied that both proposals met these
requirements. After reviewing the proposals, HRC concurs with this opinion.
Price Negotiations. It was entirely normal and acceptable procedure for DPH to include the
price submitted with the proposal in its negotiations with Health Advocates.
At that point Paralign, because it had a lower score, was, out of the picture, and had been notified
in writing to that effect. It would have been highly unfair to allow Paralign to modify its
proposal in any way after the completion of a selection process in which it was the loser, with the
idea of allowing it to get back into the competition. Only if negotiations were unsuccessful with
the highest scorer could DPH have entered into negotiations with Paralign.
CONCLUSION
There was general consensus among the panelists that Health Advocates submitted a superior
proposal; In addition, DPH conducted a well organized and documented RFP process.
However, as mentioned above, it is extremely important to avoid even the appearance of bias in
these procurements. In this regard, HRC believes that there were several flaws in the process.
First, none of the panel members should have had any recent dealings with either proposer.
Second, the partial reference checks of only one proposer should not have been given to the
panelists. If reference checks were shared with the panelists at all, then full and complete checks
for both the panelists should have been included. Finally, the letter of recommendation from the
domestic partner of the CFO should not have been included in Health Advocate's proposal.
Whether or not Health Advocates knew of the relationship, the sender must certainly have been
aware of the conflict of interest and should have refrained.
There is no evidence to show that these flaws influenced the outcome of the evaluation process
in any significant way. However, HRC believes that the most equitable resolution to this RFP
would be to convene another panel to reassess the two previously submitted proposals, removing
the letter from the CFO's domestic partner from that of Health Advocates.
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
Item 6 - File 01-0112
Departments:
Item:
Amount:
Human Resources Department (HRD)
Fire Department
Police Department
Department of Public Health (DPH)
Department of Human Services (DHS)
Sheriffs Department
Department of Parking and Traffic (DPT)
Recreation and Park Department (RPD)
Juvenile Probation Department
Hearing to consider the release of reserved funds for the
following departments to fund workers' compensation
expenses in FY 2000-2001.
$9,410,038, as follows:
Department
Amount
Department of Public Health (DPH)
Community Health Network
$2,309,684
Population Health
363.417
Subtotal Public Health
$2,673,101
Fire Department
2,122,174
Police Department
2,000,109
Department of Parking and Traffic (DPT)
724,685
Recreation and Park Department (RPD)
617,820
Sheriffs Department
501,096
Department of Human Services (DHS)
476,335
Juvenile Probation Department
294,718
t Total Requested Release of Reserves
$9,410,038
Source of Funds:
Description:
FY 2000-2001 General Fund Budget
for each department listed above
During the FY 2000-2001 budget hearings, the Finance
and Labor Committee recommended that approximately
one third of annual workers' compensation expenditure
budgets for the eight City departments listed in the table
above be placed on reserve so that the Committee could
monitor workers' compensation spending during the fiscal
year. The table shown below contains, for each of the
eight departments, the FY 2000-2001 budgeted amount
for workers' compensation, the actual expenditures
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
through December 31, 2000, the projected expenditures
through June 30, 2001, and the projected surplus or
deficit in spending for workers' compensation spending for
FY 2000-2001.
Departmental General Fund Expenditures for Workers' Compensation
through December 31, 2000*
Department
FY 2000-
2001 Budget
Actual
Expenditures
through
12/31/00
%of
Annual
Budget
Projected
Expenditures
through June
30, 2001
Projected
Surplus
(Deficit)
Public Health
Community
Health Network
$6,929,055
$3,081,843
44.5%
$6,225,323
$703,732
Population Health
1,090,252
327,044
30.0%
660,629
429,623
Subtotal
$8,019,307
$3,408,887
42.5%
$6,885,952
$1,133,355
Fire Department
6,416,523
3,017,575
47.0%
6,095,501
321,022
Police Department
6,375,329
3,309,274
51.9%
6,684,734
(309,405)
Recreation and Park
1,937,923
1,020,688
52.7%
2,061,790
(123,867)
Parking and Traffic
2,174,055
1,021,149
47.0%
2,062,722
111,333
Sheriffs Department
1,394,400
1,046,235
75.0%
1,727,515
(333,115)
Human Services
1,459,006
803,826
55.1%
1,623,728
(164,722)
Juvenile Probation
884,155
281,724
31.9%
569,082
315,073
Total
$28,660,698
$13,909,358
48.5%
$27,711,024
5949,674
*Actual expenditures from July 1, 2000 through
December 31, 2000, totaling $13,909,358, were provided
by the Workers' Compensation Division of the
Department of Human Resources (HRD), as shown in
Attachment I. Also provided by HRD, Attachment II
contains projected expenditures for FY 2000-2001 for all
General Fund and General-Fund supported departments,
totaling $48,523,011, including $27,711,024 for the eight
departments listed above.
According to HRD projections, the above table indicates
that the Public Health Department, the Fire Department,
the Department of Parking and Traffic and the Juvenile
Probation Department are all spending within their
previously approved FY 2000-2001 budget for worker
compensation.
While the Police Department, the Recreation and Park
Department and the Department of Human Services are
projected to end FY 2000-2001 with deficits in workers'
BOARD OF SUPERVISORS
BUDGET ANALYST
34
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
compensation, these three departments expect to cover
such projected deficits using existing budgeted funds from
other accounts in the departments' previously approved
FY 2000-2001 budgets, and therefore, do not expect
requesting supplemental appropriations for workers'
compensation in FY 2000-2001, according to Captain John
Goldberg of the Police Department, Ms. Mary King Gorky
of the Recreation and Park Department and Ms. Sally
Kipper of the Department of Human Services.
The Sheriffs Department, however, which is also expected
to end FY 2000-2001 with a deficit in workers'
compensation, will most likely require a supplemental
appropriation to fund the department's estimated deficit
of $333,115 for FY 2000-2001, as discussed in detail
below.
Sheriffs Department
As of December 31, 2000, the Sheriffs Department had
already expended $1,046,235, or 75.0 percent, of its total
FY 2000-2001 workers' compensation budget of
$1,394,400 and 117.1 percent of its available, unreserved
workers' compensation funding of $893,304 ($1,394,400
budgeted less reserve of $501,096). Based on workers'
compensation expenditures incurred during the first six
months of Fiscal Year 2000-01, the Sheriffs Department
is projected by the Department of Human Resources to
spend an estimated total of $1,727,515 on workers'
compensation costs during FY 2000-2001, as shown in the
table above and in Attachment II, which is 23.9 percent or
$333,115 more than the Department's total FY 2000-2001
workers' compensation appropriation of $1, 394,400. *
The Sheriffs Department attributes high workers'
compensation spending through the first six months of FY
2000-2001 (through December 31, 2000) to one
extraordinary claim that was paid in November of 2000,
which totaled $385,880, as stated in Attachment III,
provided by the Sheriffs Department. Without this one
extraordinary claim, the Sheriffs Department would have
1 Attachment III, provided by the Sheriffs Department, contains a FY 2000-2001 projection for total
expenditures for workers' compensation of $1,708,144, which is $19,371 less than HRD's projection of
$1,727,515. Ms. Jean Mariani of the Sheriffs Department concurs with HRD's projections.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
Comments:
Recommendation:
been within its workers' compensation budget for FY
2000-2001, having expended $660,133 (expenditures of
$1,046,235 less the claim of $385,880) as of December 31,
2000, or 47.3 percent of its total workers' compensation
appropriation of $1,394,400.
1. It is therefore likely that the Sheriffs Department will
require a supplemental appropriation for workers'
compensation in FY 2000-2001 in the amount of
approximately $333,115.
2. In addition, at the December 20, 2000 Finance and
Labor Committee hearing on overtime expenditures in the
Sheriffs Department, the Budget Analyst reported that
the Sheriffs Department would likely require a
supplemental appropriation in FY 2000-2001 of at least
$1,911,919 for Salaries and Fringe Benefits, including a
projected deficit in overtime funds of $1,759,730. The
projected deficit of $333,115 for workers' compensation
plus the Budget Analyst's previously projected deficit of
$1,911,919 for Salaries and Fringe Benefits, including
overtime, is likely to result in a total estimated
supplemental appropriation for the Sheriffs Department
in FY 2000-2001 of $2,245,034.
3. According to Mr. Minh Vu, Deputy Director of the
Workers Compensation Divison at HRD, and as shown in
Attachment II provided by HRD, total workers'
compensation expenditures for FY 2000-2001 for all City
departments are projected to be $54,823,445, or
$1,416,355 less than the total FY 2000-2001 City budget
for workers' compensation of $56,239,800 previously
approved by the Board of Supervisors, including
$49,021,543 budgeted for General Fund and General
Fund supported departments. Also, as shown in
Attachment II, total workers' compensation costs for
General Fund and General Fund supported departments
for FY 2000-2001 are projected to be $48,523,011, or
$498,532 less than the total FY 2000-2001 budget of
$49,021,543 previously approved by the Board of
Supervisors.
Approve the requested release of $9,410,038 in reserved
workers' compensation funds.
BOARD OF SUPERVISORS
BUDGET ANALYST
Workers Compensation Division
City and County of Sam Francisco
DEPARTMENT OF HUUAN RESOURCES
Attachment I
Page 1 of 4
Voice (415) 575-560Q
TDD (415) 575-5624
Fax Claims (415) 575-5552
Fax Administration (415) 575-56 13
MEMORANDUM
TO: Finance and Labor Committee Members
FROM: Minn Vu, Deputy Director \wS\J
DATE: January 30, 2001
SUBJECT: Request to Release Reserve on Workers'
Compensation Funds
Recommended Action
Release the reserve on the workers' compensation funds in the 2000-
2001 budget for eight departments - Fire, Police, Public Health,
Human Services, Sheriff, Parking and Traffic, Juvenile Court, and
Recreation and Parks.
Background
As part of its deliberations on the FY 2000-2001 budget, the Finance
and Labor Committee reserved a portion (approximately one-third) of
the workers' compensation budget for eight departments. Based on
current spending rate, we project that this reserve will be needed to
cover expenditures for the remainder of this fiscal year. Therefore, we
are requesting release of the reserve.
30 VAN NES3AveSU£. SUITS 3300 San ffu^oscs, CA 9*102-0027
Attachment I
Page l ot k
nequesc to Keiease reserve on wor*ers coaipeiibouuii runus
January 30, 2001
Page 2
Analvsis/Reasop for Recommendation
Through the end of December 2000, workers' compensation
expenditures for most departments are in pace with budget. For all
General Fund and General Fund supported departments, expenditures
for the first half of the fiscal year are 49% of the annual budget. For
six of the eight departments whose workers' compensation budgets
were partially held in reserve, expenditures for the first half of the
fiscal year range from 43% to 55% of annual budget. Juvenile Court
to date only spent 32% of its annual workers' compensation budget,
but Juvenile Court's budget is relatively small and therefore subject to
fluctuations In expenditures. The Sheriff's Department, on the other
hand, has already spent 75% of its annual budget due to one
extraordinary claim pay out of $385,880 In the second quarter (this
claim has now been closed), and will need to request a supplemental
appropriation of funds even if reserve is released.
Workers' Compensation Reserves
Department
1999-2000
Expenditures
2000-2001
Budget
Reserved
Expenditures 1
as of
12/31/00
Percent
of
Annual
Budget
Fire
$6,793,359
$6,416,523
$2,122,174
S3, 017, 575
47%
Police
5,906,704
6,375,329
2.000. 1C9
3.309.274
52%
Human Services
1,324,407
1.459,006
476,335
803.826
55%
Juvenile Probation
761,278
884,155
294,718
281.724
32%
Parkina St Traffic
1,978,703
2.174,055
724,685
1.021,149
47%
Recreation & Park
2.235.240
1,937.923
617,820
1.020.638
53%
Sheriff
1.421.642
1,394,400
501,096
1,046.235
75%
Public Health
-General Hospital
-Laguna Honda
-Primary Care & Forensics
-Population Health
Total
§3,222,711
2,898,258
560,905
1,140,927
7,822,801
3,466,402
2,836,045
626,608
1,090,252
8.019,307
1,155,467
945,348
■208,869
353,417
2,673.101
1,515,427
1,309,592
256,724
327,044
3.408.&&7
44%
46%
41%
30%
43%
LTotal 8 Deoartments
1 S2S,090,723
1 $23,660,698
1 S9.4lQ,G38
1 S13.SC9.353
49%
Total all General Fund
and General Fund
i Suooorted Deoartments
1 $-18,797. 545
S49.02l.543
$9,410,033
S24.2ll.147
49%
Attachment I
Fage J ot 4
Request to Release Reserve on Workers' Compensation Funds
January 30, 2Q01
Page 3
Many changes are being implemented this fiscal year to better control
workers' compensation costs and improve services. The Workers'
Compensation Division is under new management effective August
2000. Some major changes being implemented by new management
are:
♦ Transitioning to a new claims administration contract effective May
1, 2001
♦ Converting to a new claims management information system
effective May 1, 2001
♦ Re-engineering claims administration process to follow industry
"best practices" approach
♦ Expanding medical provider networks to achieve higher savings on
medical costs
♦ Conducting a needs analysis for a risk management information
system to improve quality of data collection and analysis.
These changes, together with renewed emphasis by City departments
on transitional work programs and other cost control efforts, are
holding down costs while improving services. After significant cost
increases in the past several years, this fiscal year's workers'
compensation costs for the entire City are projected to be below last
year's level based on actual expenditures for the first six months,
absent an extraordinary or catastrophic event in the second half of the
fiscal year.
City and County of San Francisco
Workers' Compensation Expenditures All Departments
Six-month Expenditure Comparison
1999-2000 2000-2001
July-December July-December
Fyppndirures Expenditures
$27,650,171 $27,329,020
Trends in Annual Expenditures
FY96-97 97-98 98-99 99-00 QQ-Q1(*^
$39,807,916 $46,294,961 $54,255,996 $55,591,559 $S4,823,445
(*) Projected using straight-line method assuming 2% increase for second half of
fiscal year and adjusted for one-time extraordinary claim pay out of $365,880.
7Q
Request to Release Reserve on worKers' compensation runus
January 30, 2001
Page 4
Attachment I
Page 4 of 4
Consequences of Negative Action
Without the release of this reserve, we will have insufficient funds
available in our workers' compensation budget to cover expenditures,
which are primarily benefit payments to our employees. Failure to
provide these legally required workers' compensation benefits in a timely
manner not only will negatively affect morale, it will also have other
serious consequences including financial penalties and possible removal of
self-insured license for the City by the California Department of Industrial
Relations.
Chief Paul Tabacco, SFFD
Captain John Goldgerg, SFPD
Trent Rhorer, DHS
Mitch Katz, DPH
Jesse Williams, Juvenile Probation
Fred Hamdun, DPT
Elizabeth Goldstein, Rec.& Park
Ken Bruce, Budget Analyst's Office
Erin Mc Grath, Mayor's Budget Office
Andrea R. Gourdine, DHR
Matthew Hymel, Controller's Office
Christine Pagan, SFFD
Captain Sandra Tong, SFFD
Sally Kipper, DHS
Monique Zmuda, DPH
Ed Lopatin, Juvenile Probation
Julia Dawson, DPT
Jeffrey Bramlett, Rec.& Park
Emilie Neumann, Budget Analyst's Office
Julian Low, Mayor's Budcet Office
William Lee, DHR
Michele Olson, Board of Supervisors
An
TQT«_ P. 66
Attachment II
Page 1 of 2
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Attachment II I
Page 1 of 2
y and County of San Francisco /^p^S^
Michael Hennessey
rICE OF THE SHERIFF fef €mmmt XA sheriff
415 - 554- 7225
MEMORANDUM
Reference 01-007
TO: Finance and Labor Committee Members
FROM: Michael Hennessey, Sheriff
DATE: January 2, 2001 (Revised January 23, 200i;
SUBJECT: Request to Release Reserve on Workers Compensation
Funds
Recommended Action
Release the reserve on $501,096 of the Sheriff's Department workers
compensation funds in the 2000-01 budget.
Background
As part of your committee's deliberations on the Sheriff's Department's
2000-01 budget, you reserved $501,096 of our total workers
compensation budget of $1,394,399. Based on our current spending
rate, we project that we will have exhausted the funds currently
available by the second quarterly billing. Therefore, we are requesting
release of the reserve.
Analysis/Reason for Recommendation
Through the end of December, 2000, with the exception of one claim,
workers compensation expenditures for the Sheriff's Department
totaled $661,132, or approximately $110,189 per month, for projected
spending of $1,322,268, or approximately 5% less than our budget of
$1,394,399. However, in November, there was an extraordinary claim
that totaled $385,880, which brings total projected spending for the
year to $1,708,144, and requires that we request this release in
Attachment III
Page z or z
Sheriff's Department
January 2, 2001 (Revised January 23, 2001)
Page 2
January, 2001, to have sufficient funding to pay this extraordinary
claim as well as our second quarter workers compensation
expenditures. We plan to submit a supplemental appropriation request
in the spring to address this extraordinary, unbudgeted claim.
Fiscal Implications:
Working with the Mayor's Office, we established our 2000-01 workers
compensation budget based on expenditure rates experienced in 1999-
2000. As shown above, without the extraordinary claim, we would be
within our workers compensation budget for this fiscal year.
We do not make a practice of including such large claim settlements in
our regular budget because the amount is usually not predictable,
relying on several possible outcomes. Instead, we believe it more
prudent to budget a reasonable expenditure rate and request a
supplemental appropriation if and when a large claim occurs.
The Workers Compensation Division previously projected the Sheriff's
Department would end the year with a deficit in its workers
compensation account of $0.8 million based on a straight-line
projection including this extraordinary claim. We believe that, except
for this claim, and presuming no other large settlements, the shortfall
in this account would be no more than the amount of the claim, that
is, $385,880, based on expenditures through November 2000.
Consequences of Negative Action: Without the release of this
reserve, we will have insufficient funds available in our workers
compensation budget to cover the second quarter billing from the
Workers Compensation Division.
If you have any questions or comments, please contact Jean Mariani at
(415) 554-4316.
cc: Gloria Young, Clerk of the Board
Mary Red, Clerk, Finance and Labor Committee
Steve Kawa, Mayor's Office
Edward Harrington, Controller
Harvey Rose, Budget Analyst
44
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
Items 7. 8. and 9 - Files 01-0150. 00-0276. and 01-0149
Note: An earlier version of the proposed ordinances (Files 00-0276 and 01-
0149) was considered under File 99-1304, and an earlier version of the
proposed resolution adopting the final negative declaration (File 01-
0150) was considered under File 99-1307. Both of these earlier
versions of the subject legislation were continued at the February 9,
2000 meeting of the Finance and Labor Committee.
Departments: Department of Building Inspection (DBI)
Mayor's Office of Housing (MOH)
Planning Department
Item: File 01-0150
Resolution adopting final negative declaration, finding
and determining that the Jobs-Housing Linkage
Ordinance will have no significant impact on the
environment, and adopting and incorporating findings of
final negative declaration.
File 00-0276
Ordinance amending Article III, Chapter II, Part II of the
San Francisco Municipal Code (Planning Code) by
amending Sections 313, 313.1, 313.2, 313.3, 313.4, 313.5,
313.6, 313.7, 313.8, 313.9, 313.10, 313.11, 313.12, 313.13,
and 313.14, to rename the "Office Affordable Housing
Production Program" as the "Jobs-Housing Linkage
Program," to apply the program to all new and expanded
hotel space of at least 25,000 square feet, to all new and
expanded entertainment space of at least 25,000 square
feet, to all new and expanded retail space of at least
25,000 square feet, and to all new and expanded research
and development space of at least 25,000 square feet; to
set forth the number of affordable housing units to be
constructed for each type of development subject to this
ordinance; to increase the number of affordable housing
units and fees for office developments; and by adding
Section 313.15 to require a study every five years
determining the demand for housing created by
commercial development.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
File 01-0149
Ordinance amending Article III, Chapter II, Part II of the
San Francisco Municipal Code (Planning Code) by
amending Sections 313, 313.1, 313.2, 313.3, 313.4, 313.5,
313.6, 313.7, 313.8, 313.9, 313.10, 313.11, 313.12, 313.13,
and 313.14, to rename the "Office Affordable Housing
Production Program" as the "Jobs-Housing Linkage
Program," to apply the program to all new and expanded
hotel space of at least 25,000 square feet, to all new and
expanded entertainment space of at least 50,000 square
feet, and to all other new and expanded retail space of at
least 100,000 square feet; to set forth the number of
affordable housing units to be constructed for each type of
development subject to this ordinance; to set forth fees
for each type of development subject to this ordinance; to
increase the number of affordable housing units and fees
for office developments; and by adding Section 313.15 to
require a study every five years determining the demand
for housing created by commercial development.
Description: The current Office Affordable Housing Production
Program was established in 1985 under Planning Code
Section 313. This program linked the development of
office buildings to the demand for affordable housing by
requiring that the developers of offices over 50,000 square
feet either build affordable housing or pay an in lieu fee.
A 1990 amendment to the Planning Code reduced the
threshold size for office developments from 50,000 to
25,000 square feet. Therefore, the current ordinance
requires developers of office space which meet or exceed
the 25,000 square feet threshold to either:
• Build one affordable housing unit for every 6,250
square feet of new and expanded office space
constructed. This represents 16 affordable housing
units for every 100,000 square feet of new and
expanded office space constructed; or
• Pay an in lieu fee of $7.05 for each square foot of new
and expanded office space constructed to the Citywide
Affordable Housing Fund in lieu of building affordable
housing units.
BOARD OF SUPERVISORS
BUDGET ANALYST
46
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
The two proposed ordinances (Files 00-0276 and 01-0149)
would extend the Office Affordable Housing Production
Program, to be renamed the "Jobs-Housing Linkage
Program," to also cover new and expanded hotel,
entertainment, and retail space. Furthermore, under File
00-0276 (but not under File 01-0149), the Jobs-Housing
Linkage Program would also cover research and
development space as a separate category. Table 1 below
compares the key changes contained in these two
proposed ordinances from the existing Office Affordable
Housing Production Program.
Table 1: Comparison of key changes contained in the two proposed
ordinances
-
File 00-0276
File 01-0149
Program applies to
Office (unchanged)
25,000
Office (unchanged)
25,000
following new and
Hotel
25,000
Hotel
25,000
expanded spaces
Entertainment
25,000
Entertainment
50,000
which meet, or
Retail
25,000
Retail
100,000
exceed, the
Research & Development
25,000
specified square
footage:
Number of
Office (unchanged)
16
Office (unchanged)
16
affordable housing
Hotel
11
Hotel
11
units to be
Entertainment
14
Entertainment
14
constructed per
Retail
14
Retail
14
100,000 sq. ft of new
Research & Development
20
and expanded space
(pro-rated):
In lieu fee payable
Office (current fee = $7.05)
$11.34
Office (current fee = $7.05)
$10.00
by developers
Hotel*
$8.50
Hotel*
$4.25
instead of
Entertainment*
$10.57
Entertainment*
$5.29
constructing
Retail*
$10.57
Retail*
$5.29
affordable housing
Research & Development*
$7.55
units, per additional
gross sq. foot, Mar.
11, 1999
(retroactive)
through Dec. 31,
2001:
* No fees are charged under the existing Office Affordable Housing Production Program.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
File 00-0276
File 01-0149
In lieu fee per
additional gross sq.
foot, Jan. 1, 2002
onwards:
Office (current fee = $7.05) SI 4.96
Hotel* SI 1.21
Entertainment* $13.95
Retail* $13.95
Research & Development* $9.97
Office (current fee = $7.05) $14.00
Hotel* $4.25
Entertainment* $5.29
Retail* $5.29
Fee revisions:
To be revised annually from
January 1, 2003.
To be revised annually from
November 1, 2001.
Program does not
apply to the
following1:
Mission Bay North and South
development projects which are
consistent with redevelopment
plans and interagency cooperation
agreements approved by the Board
of Supervisors2.
Pharmacies and grocery stores
which would benefit areas
underserved by such retail uses.
Mission Bay North and South
development projects which are
consistent with the redevelopment
plans and interagency cooperation
agreements approved by the Board
of Supervisors.
No fees are charged under the existing Office Affordable Housing Production Program.
Under both proposed ordinances, commercial property
developers would be given a third mitigation payment
option in addition to either constructing affordable
housing or paying the in lieu fee. Commercial property
developers would be able to contribute land, of equivalent
value to the in lieu fee, to affordable housing developers to
construct the specified number of affordable housing units
on the commercial property developers' behalf3. However,
1 The existing ordinance exempts commercial property developments on land which is owned by
Federal or State governments, or which is under the jurisdiction of the San Francisco Redevelopment
Agency or the Port Authority. Both of the proposed ordinances would further exempt Mission Bay
redevelopment projects under certain circumstances. The ordinance under File 00-0276 would
further exempt pharmacies and grocery stores which would benefit areas underserved by such retail
uses.
2 According to Ms. Bauman, the Mission Bay North Redevelopment Plan and Interagency
Cooperation Agreement were approved by the Board of Supervisors on October 26, 1998 (Ordinance
327-98), while the Mission Bay South Redevelopment Plan and Interagency Cooperation Agreement
were approved by the Board of Supervisors on November 2, 1998 (Ordinance 335-98).
3 If a developer chooses to contribute land for affordable housing developments in lieu of the other
mitigation payment options, then the value of the land must be equal to, or greater than, the in lieu
fees otherwise payable. Therefore, both proposed ordinances would require an appraisal report, as
BOARD OF SUPERVISORS
BUDGET ANALYST
48
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
only File 01-0149 further specifies that such land should
be "suitable for housing use."
The proposed final negative declaration (File 01-0150)
was adopted on April 27, 1999 by the Planning
Commission which found that there was no substantial
evidence that an extended Jobs-Housing Linkage
Program would have a significant impact on the
environment.
Comments: 1. Developers of new office space larger than 25,000
square feet are required under the existing Office
Affordable Housing Production Program to either (a)
construct a specified number of affordable units
themselves, or (b) pay a fee of $7.05 per square foot to the
Citywide Affordable Housing Fund in lieu of building
affordable housing4. The in lieu fee was set at $7.05 in
1994 and has not been increased since that time, despite
the existing law's provision permitting the Planning
Department to impose increases of up to 20 percent
annually based on increases to the Average Area Purchase
Price Safe Harbor Limitations for New Single-Family
Residences for the San Francisco Primary Metropolitan
Statistical Area (PMSA), published by the Internal
Revenue Service. In the event that the Internal Revenue
Service does not adjust its PMSA statistics within a 14-
month period, the current ordinance allows the Planning
Commission to authorize a study for adjusting the last
published Internal Revenue Service figure, to be effective
until the Internal Revenue Service revises its PMSA
statistics. Since the Internal Revenue Service has not
published an update to its report since 1994, the Mayor's
Office of Housing has contracted with private experts to
obtain average area purchase price analyses for the San
Francisco PMSA in 1998 and 2000. The 2000 report,
prepared by Vernazza Wolfe Associates, indicates a 73.3
percent increase in purchase price figures for new
defined by the Uniform Standards of Professional Appraisal Practice, to be prepared by a Member of
the Appraisal Institute, which determines the fair market value of any land being contributed.
4 The in lieu fee is payable to the Planning Department prior to the Department of Building
Inspection issuing the first building permit for a new development. Therefore, the in lieu fee must
be paid before any construction can begin. If, during construction, the type or square footage of a
development changes, then the developer must go back to the Planning Department and the
Department of Building Inspection for consideration of the change.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
construction during the five-year period between 1994
and 1999. If the in lieu fee for new and expanded office
space had also been increased by 73.3 percent, it would
now be $12.22 per square foot.
2. According to Mr. Costolino Hogan of the Planning
Department, the $7.05 fee has not been increased since
1994 because the Planning Department has not
considered the matter. Both Mr. Hogan and Mr. Joe
LaTorre of the Mayor's Office of Housing note that the
City's real estate market was flat in the period between
1994 and 1998. Mr. LaTorre states that by 1998, when
the real estate market was rising in cost and the Internal
Revenue Service had not issued new PMSA statistics, the
MOH contracted for new statistical information which
was made available to the Planning Department.
Office, Hotel, Entertainment, and Retail Space
3. Under the two proposed ordinances (Files 00-0276
and 01-0149), the Jobs-Housing Linkage Program would
be extended to cover development of the following new
and expanded spaces:
(a) Hotel spaces 25,000 square feet or more.
(b) Entertainment spaces either 25,000 square feet or
more (File 00-0276), or 50,000 square feet or more
(File 01-0149).
(c) Retail spaces either 25,000 square feet or more (File
00-0276), or 100,000 square feet or more (File 01-
0149).
Neither of the proposed ordinances would apply to
commercial property developments which construct less
space than the square footage thresholds specified above.
4. According to Ms. Catherine Bauman of the Planning
Department, most office developers currently choose to
pay the in lieu fee, rather than build the required number
of affordable housing units. Mr. LaTorre states that the
in lieu fee revenue is held in the Citywide Affordable
Housing Fund administered by the Planning Department
which provides loans to affordable housing developers,
subject to the approval of the Director of Planning, in
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
accordance with the existing Office Affordable Housing
Production Program ordinance previously approved by the
Board of Supervisors. Mr. LaTorre states that the
Mayor's Office of Housing makes recommendations to the
Director of Planning as to which proposed affordable
housing developments are in conformity with the subject
legislation and the City's overall goals for housing
development and which, therefore, are eligible to receive
development funds from the Citywide Affordable Housing
Fund and other funding sources.
5. The two proposed ordinances (Files 00-0276 and 01-
0149) provide that equivalent numbers of affordable
housing units would be constructed by developers to meet
the requirements of the Jobs-Housing Linkage Program
for new and expanded office, hotel, entertainment, and
retail space. However, the proposed in lieu fees payable
by developers if they choose not to construct affordable
housing themselves differ in the two proposed ordinances,
as shown in Table 2 below.
Table 2: Comparison of proposed in lieu fees
Proposed Fee
Proposed Fee
Percentage Difference in
File
File
Fees Under File 00-0276
Category of space
01-0149
00-0276
Over File 01-0149 /
March 11, 1999 through
Dec. 31. 2001
Office
$10.00
$11.34
13.40
Hotel
$4.25
$8.50
100.00
Entertainment
$5.29
$10.57
99.81
Retail
$5.29
$10.57
99.81
January 1, 2002 onwards
Office
$14.00
$14.96
6.86
Hotel
$4.25
$11.21
163.76
Entertainment
$5.29
$13.95
163.71
Retail
$5.29
$13.95
163.71
6. Ms. Audrey Williams Pearson of the City Attorney's
Office states that there is no precise correlation between
BOARD OF SUPERVISORS
BUDGET ANALYST
51
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
the number of affordable housing units and the in lieu fee
levels which would be required under the two proposed
ordinances. The level at which in lieu fees are set, and
the differentiation between fee levels for different
categories of space (office, hotel, entertainment, or retail),
are policy decisions for the Board of Supervisors.
Estimated Fee Revenues for New and Expanded
Office, Hotel, Entertainment, and Retail Space
7. Adoption of either proposed ordinance would result
in increased revenues for the Citywide Affordable
Housing Fund, or other benefits such as increased
numbers of affordable housing units built by developers,
or increased contributions of land or money to affordable
housing developers. To determine the extent of such
benefits, the Budget Analyst used construction estimates
prepared by the Planning Department for the ten-year
period 2000 through 2010. Ms. Bauman states that the
estimates provided by the Planning Department are
based on what the Planning Department estimates is (a)
the demand for new and expanded office, hotel,
entertainment, and retail space in the City, and (b) the
employment demand which would result from such
development, consistent with the Association of Bay Area
Governments' regional employment projections through
2010. The Planning Department estimates for the 10
year period from Year 2000 through Year 2010 that there
may be construction of:
(a) Approximately 9,600,000 square feet of new office
space.
(b) Approximately 1,200,000 square feet of new hotel
space.
(c) Approximately 2,400,000 square feet of new
entertainment and retail space.
This represents a total of 13,200,000 square feet of new
office, hotel, entertainment, and retail space in the City
which could be subject to the Jobs-Housing Linkage
Program. If all 13,200,000 square feet of such office,
hotel, entertainment, and retail space were constructed,
then the Citywide Affordable Housing Fund would realize
BOARD OF SUPERVISORS
BUDGET ANALYST
52
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
the maximum estimated in lieu fee revenues shown in
Table 3 below, assuming that:
• All of the constructed square footage is in
developments which meet the square footage
thresholds, which are higher for some categories under
File 01-0149. This would be somewhat more likely
under the File 00-0276 proposal which has lower
thresholds for new and expanded entertainment and
retail space than the File 01-0149 proposal.
• None of the constructed square footage falls within the
proposed ordinances' permitted exemptions.
• All developers would choose to pay in lieu fees instead
of either building affordable housing themselves, or
contributing money and land of an equivalent value to
affordable housing developers.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
Table 3:
Estimated Revenue from Expanded Jobs-Housing Linkage Program.
2000-2010, Based on Planning Department Estimates of New and
Expanded Office, Hotel. Entertainment, and Retail Space
In Lieu
In Lieu
Fee Total if
Fee Total
100% of
if 50% of
New Space
New Space
Square
Square
Meets
Meets
Space
Footage
Footage
Fee
Ordinance
Ordinance
Category
Prooosed Fees
Subtotal
Total
Subtotal
Criteria
Criteria
File 00-
0276
Office
$11.34 through 12/31/01
$14.96 from 01/01/02
1,920,000
7.680.000
9,600,000s
$21,772,800
114.892,800
$136,665,600
$68,332,800
Hotel
$8.50 through 12/31/01
$11.21 from 01/01/02
240,000
960.000
1,200,000
2,040,000
10.761.600
12,801,600
6,400,800
Enter-
$10.57 through 12/31/01
480,000
5,073,600
tainment
$13.95 from 01/01/02
1.920.000
26.784.000
/Retail
2.400.000
31.857.600
15.928.800
TOTAL
13,200,000
$181,324,800
590,662,400
File 01-
0149
Office
$10.00 through 12/31/01
$14.00 from 01/01/02
1,920,000
7.680.000
9,600,000*
$19,200,000
107.520,000
$126,720,000
$63,360,000
Hotel
$4.25
1,200,000
5,100,000
2,550,000
Enter-
$5.29
2.400.000
12.696.000
6.348,000
tainment
/Retail
TOTAL
13,200,000
$144,516,000
$72,258,000
5 Under File 00-0276, it is likely that some office space would be reclassified as "research and
development" space which would not be subject to Proposition M office development ceilings. (See
Comment No. 9.)
6 Under File 01-0149, some space which would be considered "research and development" space
under File 00-0276 would instead be covered by this proposed ordinance's expanded definition of
office space, and would therefore be subject to Proposition M office development ceilings. (See
Comment No. 10.)
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
The above table assumes that 20 percent of estimated
projects would require developers to pay in lieu fees prior
to December 31, 2001 at the lower in lieu fee rates, while
the remaining 80 percent of estimated projects would
require developers to pay in lieu fees at the higher in lieu
fee rates from January 1, 2002 onwards.
8. Therefore, the Planning Department's estimated
increase of 13,200,000 square feet of new office, hotel,
entertainment, and retail space in the City could provide
maximum estimated in lieu fee revenues of $181,324,800
under File 00-0276, or $144,516,000 under File 01-0149, a
difference of $36,808,800 more under File 00-0276, during
the ten-year period between 2000 and 2010. Of this
amount, $136,665,600 under File 00-0276, or
$126,720,000 under File 01-0149, a difference of
$9,945,600 more under File 00-0276, would be generated
by new office development which is already covered by the
current ordinance. Therefore, the balance of $44,659,200
under File 00-0276 (comprising $12,801,600 for new hotel
space and $31,857,600 for new entertainment and retail
space), or $17,796,000 under File 01-0149 (comprising
$5,100,000 for new hotel space and $12,696,000 for new
entertainment and retail space), a difference of
$26,863,200 more under File 00-0276, would be generated
by the proposed extension of the Jobs-Housing Linkage
Program to cover new and expanded hotel, entertainment,
and retail developments.
However, due to the assumptions listed in Comment No.
7, it unlikely that in lieu fee revenue would be as high as
$181,324,800 under File 00-0276, or $144, 516,000 under
File 01-0149, because it is unlikely that (a) all the
estimated square footage would be constructed, (b) all the
constructed space would exceed the threshold amounts,
and (c) none of the developments would be exempted.
Furthermore, some developers might choose to build
affordable housing themselves, or contribute money or
land of an equivalent value to affordable housing
developeis, rather than pay an in lieu fee.
As shown in Table 3, even if only 50 percent of the
maximum estimated in lieu fee revenue was available
during the ten-year period between 2000 and 2010, File
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
00-0276 could generate an estimated $90,662,400, while
File 01-0149 could generate an estimated $72,258,000.
Research and Development Space
9. Only File 00-0276 proposes extending the Jobs-
Housing Linkage Program to cover new and expanded
research and development space of 25,000 square feet or
more as a separate category. Such space is defined as
space:
... intended or primarily suitable for basic and
applied research or systematic use of research
knowledge for the production of materials, devices,
systems, information or methods, including design,
development and improvement of products and
processing, including biotechnology, which involves
the integration of natural and engineering sciences
and advanced biological techniques using organisms,
cells, and parts thereof for products and services,
excluding laboratories which are defined as light
manufacturing uses ....
Ms. Bauman advises that the Planning Department does
not separately collect information on the construction of
such research and development space. Therefore, the
Planning Department is unable to provide an estimate of
the in lieu fee revenues based on such a category of space.
10. By contrast, File 01-0149 proposes an expanded
definition of office space which might include components
of File 00-0276's proposed research and development
space, such as computer and data processing services,
multimedia, and research and development of any
computer-based technology (excluding life sciences
research and laboratories).
Final Negative Declaration
11. The final negative declaration (File 01-0150) was
approved by the Planning Commission on April 27, 1999
prior to submission of the two proposed ordinances. On
December 6, 2000, Ms. Lisa Gibson of the Planning
Department conducted a subsequent review of the two
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 7, 2001 Finance Committee Meeting
Recommendation:
proposed ordinances (Files 00-0276 and 01-0149) and
found that they would not have immediate physical
consequences or create substantial, unanticipated growth,
and that individual affordable housing developments
using Jobs-Housing Linkage Program funds or land would
each be subject to Planning Department review of project-
specific environmental impacts. Therefore, Ms. Gibson
determined that the conclusions reached in the final
negative declaration adopted and issued on April 27, 1999
remain valid and that no supplemental environmental
review is required.
Approval of either of the two proposed ordinances, File 00-
0276 or File 01-0149, and approval of the proposed
resolution (File 01-0150), are policy matters for the Board
of Supervisors.
Supervisor Leno
Supervisor Peskin
Supervisor Gonzalez
Clerk of the Board
Controller
Steve Kawa
Harvey M. Rose
BOARD OF SUPERVISORS
BUDGET ANALYST
0.2.5
I*
City and County of Jjian Francisco
Meeting Minutes
Finance Committee
Members: Supervisors Mark Leno, Aaron Peskin and Matt Gonzalez
Clerk: Gail Johnson
[All Committees]
Government Document Section
Main Library
Wednesday, February 14, 2001
10:00 AM
Regular Meeting
City Hall, Room 263
Members Present: Mark Leno, Aaron Peskin, Matt Gonzalez.
MEETING CONVENED
The meeting convened at 10:05 a.m.
002146 [Grant to develop a green building tool kit and support green building practices through training
workshops]
Supervisors Leno, Newsom
Resolution authorizing the Department of the Environment to accept and expend a grant in the amount of
$72,450 from the California Integrated Waste Management Board. (Environment)
12/6/00, RECEIVED AND ASSIGNED to Public Health and Environment Committee.
2/5/01, TRANSFERRED to Finance Committee.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Cal Broomhead, Department of the
Environment.
RECOMMENDED., by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
010110 [Lease of City-owned property at 850 Bryant Street]
Resolution authorizing and approving lease of City-owned property located on the fust floor of the Hall of
Justice, 850 Bryant Street, to the Northern California Service League. (Real Estate Department)
1/19/01, RECEIVED AND ASSIGNED to Finance Committee.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Anthony Delucchi, Director of Property, Real
Estate Division, Administrative Services Department; Shirley Melnicoe, Executive Director, Northern
California Service League.
RECOMMENDED., by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
DOCUMENTS DEPT
PEB 2 2 200)
SAN FRANCISCO
PUBLIC LIBRARY
City and County of San Francisco
Printed at 7:29 PM on 2/20/01
Finance Committee
Meeting Minutes
February 14, 2001
010111 [Lease of City-owned property at 400 McAllister Street]
Resolution authorizing and approving lease of City-owned property located on the first floor of the Civic
Center Courthouse, 400 McAllister Street, to the Northern California Service League. (Real Estate Department)
1/19/01, RECEIVED AND ASSIGNED to Finance Committee.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Anthony Delucchi, Director of Property, Real
Estate Division, Administrative Services Department; Shirley Melnicoe, Executive Director, Northern
California Service League.
RECOMMENDED., by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
010146 [Lease of property at 1360 Mission Street for DPH-Employee Assistance Program|
Resolution authorizing a new lease of real property currently occupied by the City under the terms of an earlier
lease at 1360 Mission Street, San Francisco, for a term of three years commencing retroactively as of July 1,
2000 at an initial monthly rent of 58,000 per month for the Employee Assistance Program of the Department of
Public Health. (Real Estate Department)
1/24/01, RECEIVED AND ASSIGNED to Finance Committee
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Judy Schutzman, Department of Public
Health; Anthony Delucchi, Director of Property, Real Estate Division, Administrative Services Department,
Theodore Lakey, Deputy City Attorney; Steve Alms, Real Estate Department
CONTINUED TO CALL OF THE CHAIR by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
ADJOURNMENT
The meeting adjourned at II: 12 a.m.
City and County of San Francisco
Printed at 7:29 PM on ZWOl
[Budget Analyst Report]
Susan Horn
Main Library-Govt. Doc. Section
CITY AND COUNTY
OF SAN FRANCISCO
BOARD OF SUPERVISORS
BUDGET ANALYST
1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642
FAX (415) 252-0461
February 8, 2001
TO: ^Finance Committee
FROM: , Budget Analyst
SUBJECT:^February 14, 2001 Finance Committee Meeting
Item 1 - File 00-2146
Department:
Item:
DOCUMENTS DEPT,
FEB 1 4 2001
SAN FRANCISCO
pUBLIC LIBRARY
Amount:
Grant Period:
Source of Funds:
Required Match:
Indirect Costs:
Description:
Department of the Environment
Resolution authorizing the Department of the
Environment to accept and expend a grant in the amount
of $72,450 from the California Integrated Waste
Management Board.
$72,450
December 1, 2000 through April 30, 2003 —
approximately 29 months (see Comment No. 5)
California Integrated Waste Management Board
None (see Comment No. 1)
Indirect costs are not allowed by the granting agency.
In July of 1999, the Board of Supervisors adopted the
Resource Efficient Building (REB) ordinance, which
established a REB program and assigned a number of
responsibilities to the Department of the Environment,
including: (1) developing and implementing a green
Memo to Finance Committee
February 14, 2001 Finance Committee Meeting
building training program, (2) providing information
about green buildings to tbe public, thereby encouraging
the adoption of resource-efficient building in the private
sector, and (3) creating a pilot program to demonstrate
innovative construction techniques, building materials,
landscaping methods, and other resource-efficient
building systems in municipal faculties. According to
Mr. Cal Broomhead of the Department of the
Environment, green building programs produce buildings
that are healthier for the occupants and have less impact
on the local and global environment than standard
building programs.
The subject grant would fund the development of a green
building tool kit and support green building practices
through a series of training workshops, as required by the
REB ordinance. The tool kit, including a general green
building description, resource lists, sample specification
and contract language, and other materials, will be
developed for City staff, as well as for businesses and the
general public. Each of the four training workshops will
target a specific audience, including members of the
Bureau of Architecture and Bureau of Engineering,
departmental green building liaisons, and REB pilot
project teams, including project managers, architects,
engineers and facility managers. The first two training
workshops would be conducted in June of 2001, and the
other two training workshops would be conducted in
January of 2002.
Budget: Attachment I, provided by the Department of the
Environment, provides budget details to support the
proposed project.
Comments: 1. As shown in Attachment I, although matching funds
are not required by the granting agency, the Department
has budgeted $45,000 in its Fiscal Year 2000-2001 budget,
as approved by the Board of Supervisors, in additional
funding for this project. According to Mr. Broomhead, the
Department does not expect to budget additional funds in
future fiscal years for the proposed project. To date, none
of the subject grant funds have been expended.
BOARD OF SUPERVISORS
BUDGET ANALYST
2
Memo to Finance Committee
February 14, 2001 Finance Committee Meeting
2. Of the $72,450 in subject grant funds, $450 would
remain in the Department's budget to cover operating
costs associated with the proposed project such as phone,
fax, photocopying and mail, as shown in Attachment II.
Contractual services would be provided by Global Green
USA with the remaining grant funds of $72,000. Of the
$72,000, $65,195 in subject grant funds would cover a
portion of the personnel costs of developing and
implementing the training workshops and designing the
green tool kit. The remaining $6,805 would cover the
operating expenses incurred by Global Green USA. As
previously stated, $450 would remain in the Department's
budget to cover the operating costs incurred by the
Department, for a total of $7,255 in operating costs for the
proposed project.
3. Global Green USA was selected on a sole source basis
to work with the Department of the Environment to
design and conduct training workshops and the green
building tool kit. Global Green USA was selected on a sole
source basis because of their expertise in the area of
developing and implementing green building programs.
According to Mr. Broomhead, Global Green's involvement
is integral to both the successful application and
implementation of this project. The application was
submitted by Global Green USA to the Department of the
Environment after the Department of the Environment
received a letter from the City Attorney's Office stating
the following: "We conclude that the San Francisco
Charter and Administrative Code do not require a bidding
process to select the non-profit agency the Department
wants to work with or to utilize that non-profit to perform
the work that is the subject of the grant, so long as the
grant application to the State clearly describes the
proposed plan, including the involvement of the non-
profit, and the State has no objection."
4. Attachment II is a Grant Application Information
Form, as prepared by DPH, which includes a Disability
Access Checklist.
BOARD OF SUPERVISORS
BUDGET ANALYST
3
Memo to Finance Committee
February 14, 2001 Finance Committee Meeting
5. Attachment II states that the subject grant project
schedule is from December of 2000 through May of 2002.
However, Mr. Broomhead reports that the subject grant
project schedule is actually from December 1, 2000
through April 30, 2003.
Recommendation: Approve the proposed resolution.
BOARD OF SUPERVISORS
BUDGET ANALYST
4
Attachment I
Exhibit D: BUDGET ITEMIZATION
Amended November 6, 2000
Proposed Budget for Program Implementation Project:
SF Environment
Total Cost
REB
Program
Funds
Grant
Request
Task 1: Develop Tool Kit
1.1: Develop and Administer "Needs"
Survey
S 8,854
$4,855
$3,999
1.2: Analyze Survey Results
$4,251
$1,055
$3,196
1.3: Identify Existing Resources and Tool
Kit Components for Development
$ 9,592
$2,095
$ 7,497
1.4: Develop Draft Tool Kit
$23,403
$7,400
$16,003
1.5: Develop Final Tool Kit
$ 18,131
$8,630
$9,501
Task 1 Subtotal
$40,196
Task 2: Develop and Conduct Training
"Workshops
2.1: Develop Workshops
$24,630
$ 7,625
$17,005
2.2: Conduct Workshops
$21,334
$ 13,340
$ 7,994
Task 2 Subtotal
$24,999
Other Costs
Printing — Tool Kit Materials
$2,000
$2,000
Graphic Design
$2,000
$2,000
Workshop Materials
$375
$375
Phone/Fax
$250
$ 250
Postage
$250
S 250
Travel
$2,380
$2,380
Other Costs Subtotal
S7?55
TOTAL
$117,450
$45,000
$72,450
. t ■ Attachment II
.•'," • Pa.f>e 1 of 2
File Number:
(Provided by Clerk of Board of Supervisors)
Grant Information Form
(Effective January 2000)
Purpose: Accompanies proposed Board of Supervisors resolutions authorizing a Department to accept and
expend grant funds.
The following describes the grant referred to in the accompanying resolution:
1 . Grant Title: Green Building Tool Kit and Training Workshops
2. Department: Environment
3. Contact Person: Cal Broomhead Telephone: (415) 554-6390, (415) 934-4802
4. Grant Approval Status (check one):
[ ] Approved by funding agency [X] Not yet approved
5. Amount of Grant Funding Approved or Applied for: $72,450
$45,000 of REB program funds are already in the Department of the Environment budget.
6a. Matching Funds Required: SO
b. Source(s) of matching funds (if applicable): N/A
7a. Grant Source Agency: California Integrated Waste Management Board
b. Grant Pass-Through Agency (if applicable): N/A
8. Proposed Grant Project Summary: This project is designed to develop a green building tool kit and
support green building practices through a series of training workshops. The tool kit, including
resource lists, sample specification and contract language, and other materials, will be developed for
City & County of San Francisco staff, as well as for businesses and residents in and beyond San
Francisco's borders. Each of the workshops will target a specific audience such as architects,
engineers, and departmental green building liaisons.
9. Grant Project Schedule, as allowed in approval documents, or as proposed:
Start-Date: December, 2000 End-Date: May, 2002
10. Number of new positions created and funded: 0
1 1 . If new positions are created, explain the disposition of employees once the grant ends? N/A
12a. Amount budgeted for contractual services: $72,000 ($450 will remain in the Department budget to cover
hard costs for phone, fax, photocopying and mail.)
Attachment II
.' • b. Will contractual services be put out to bid? No. The City Attorney has advised the Department of
the Environment that bidding out the contractual services is not required unless bidding is
required by the granting agency (which it does not).
c. If so, will contract services help to further the goals of the department's MBE/WBE
requirements? N/A
d. Is this .likely to be a one-time or ongoing request for contracting out? One-time
13a. Does the budget include indirect costs? []Yes [X] No
b1 . If yes, how much? $ N/A
b2. How was the amount calculated? N/A
c. If no, why are indirect costs not included?
[X] Not allowed by granting agency [ ] To maximize use of grant funds on direct services
[ ] Other (please explain):
14. Any other significant grant requirements or comments:
"Disability Access Checklist***
15. This Grant is intended for activities at (check all that apply):
[ ] Existing Site(s) [ ] Existing Structure(s) [X] Existing Program(s) or Service(s)
[ ] Rehabilitated Site(s) [ j Rehabilitated Structure(s) [ ] New Program(s) or Service(s)
[ ] New Site(s) [ ] New Structure(s)
16. The Departmental ADA Coordinator and/or the Mayor's Office on Disability have reviewed the proposal
and concluded that the project as proposed will be in compliance with the Americans with Disabilities Act and
all other Federal, State and local access laws and regulations and will allow the full inclusion of persons with
disabilities, or will require unreasonable hardship exceptions, as described in the comments section:
Comments:
Departmental or Mayor's Office of Disability Reviewer:_
Date Reviewed:
(Name)
Department Approval: Francesca Vietor Director
Memo to Finance Committee
February 14, 2001 Finance Committee Meeting
Item 2 -File 00-0110
Departments:
Item:
Location:
Lessor:
Lessee:
Administrative Services Department
Real Estate Division (RED)
Resolution authorizing and approving a new lease of City-
owned space located on the first floor of the Hall of
Justice, 850 Bryant Street, to the Northern California
Service League.
Room 106 and Room 116 of the Hall of Justice building
located at 850 Bryant Street.
City and County of San Francisco
Northern California Service League
No. of Sq. Ft. and
Cost Per Year Payable
by the Lessee to the
City:
Purpose of Lease:
Term of Lease:
Right of Renewal:
621 sq. ft. at $1.00 per year.
Space for the Pre-release Program, which provides social
services for jail inmates, and for a Children's Waiting
Room for children whose parents have business with the
Superior Court. The Northern California Service League
currently occupies the subject 621 sq. ft. of City-owned
space at 850 Bryant Street on a month-to-month basis.
March 1, 2001 through February 28, 2002 (one year)
The lessee has 9 consecutive one-year options to extend
the term of the lease.
Utilities Provided
By Lessor:
Janitorial Services
Provided by Lessee:
Description:
The City will pay for all utilities.
The lessee will be responsible for janitorial services
within their leased space.
The proposed resolution would authorize a one year lease
of the 294 sq. ft. of Room 106 and the 327 sq. ft. of Room
116, for a total of 621 sq. ft. of City-owned space at the
Hall of Justice, to the Northern California Service
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 14, 2001 Finance Committee Meeting
League. The Northern California Service League is a
nonprofit organization that provides services to persons
in, and recently released from jail or prison. The Northern
California Service League has occupied Rooms 106 and
116 in the Criminal Courthouse at the Hall of Justice
since 1991. As noted in the Attachment provided by the
Real Estate Division, the Northern California Service
League occupied the subject two rooms from 1991 to 1997
under two separate leases. According to Ms. Carla Lieske
of the City Attorney's Office, since the termination of the
two leases in 1997, under State Common Law the
Northern California Service League has continued to
occupy the subject rooms on a holdover basis under the
provisions of the old leases. The Northern California
Service League has paid the City $1.00 per year in rent
for the subject space since 1991. The proposed lease would
authorize the lease of the same space in Rooms 106 and
116 of the Hall of Justice to the Northern California
Service League under one new consolidated lease.
The Northern California Service League operates both the
Pre-release Program in Room 106 consisting of 294 sq. ft.
and the Children's Waiting Room in Room 116 consisting
of 327 sq. ft. The Pre-release Program provides
educational programs, parenting classes, and counseling
for jail inmates. The Pre-release Program has three staff
members, including an Administrator and two
Counselors, and approximately 10 volunteers. Ms. Jean
Medlar of the Real Estate Division reports that most of
the Pre-release Program activities with inmates take
place in the City's jails. The Children's Waiting Room is a
childcare center for children whose parents have business
with the Superior Court. The Children's Waiting Room
has two staff members, one Coordinator and one
Assistant, who provide childcare to a maximum of 8
children at any given time. Ms. Medlar reports that the
Children's Waiting Room is open for use between the
hours of 8:30 a.m. to 12 p.m., and 1 p.m. to 4:30 p.m.,
Monday through Friday, on days when the Superior Court
is in session. According to Ms. Medlar, the Children's
Waiting Room is available for use by persons using the
Superior Court (such as family court clients, criminal
defendants and jurors), at no charge, but is not available
as a permanent childcare facility for court employees.
BOARD OF SUPERVISORS
BUDGET ANALYST
9
Memo to Finance Committee
February 14, 2001 Finance Committee Meeting
Comments:
1. According to Ms. Medlar, the 621 sq. ft. of space at the
Hall of Justice has a fair market value of approximately
$3.75 per sq. ft. per month, totaling $27,945 in rent per
year. Ms. Medlar states that because the Pre-release
Program and the Children's Waiting Room provide a
public benefit to the City, the rent for the subject
properties paid by the Northern California Service
League to the City is $1.00 annually, the same rent which
the Northern California Service League has paid the City
since 1991.
Recommendation:
2. Item 3, File 01-0111, of this report to the Finance
Committee pertains to another lease of City-owned
property to the Northern California Service League for a
Children's Waiting Room in the Civic Center Courthouse.
Approval of the proposed resolution is a policy matter for
the Board of Supervisors.
BOARD OF SUPERVISORS
BUDGET ANALYST
10
Attachment
City and County of San Francisco
Real Estate Division
Administrative Services Department
MEMORANDUM
February 6, 2001
TO:
FROM:
SUBJECT:
Harvey M. Rose
Budget Analyst, Board of Supervisors
Anthony J. DeLucc
Director of Propei
History of Leases to Northern California service League
For Children's Waiting Room and Pre-release Program
On 1/29/91, Northern California Service League leased two rooms located on the main floor of the
Hall of Justice at 850 Bryant Street from the City and County of San Francisco, authorized by
Ordinance Numbers 20-91 and 21-91. Each room was given a separate lease under the same terms
and conditions. These leases were for room 106, the Children's Waiting Room, and room 116, the
Pre-release Program. The courts had requested that such programs be established. Due to the
public benefit that these programs offer, each room was leased at the below market rate of SI per
annum for a two year period, with two additional two year extensions. At the expiration of both
lease extensions in 1997, their service to the City and County of San Francisco continued on a
month-to-menth basis.
Northern California Service League and the Civic Center Courthouse arranged to provide space for
a Children's Waiting Room in room 111 at 400 McAllister Street. This was recently brought to our
attention.
Many lease provisions apply to the building in which the rooms are located. It would be redundant
to give separate leases to a tenant who leases multiple rooms in a single building. Therefore, we are
proposing that Northern California Service League be given one lease for each building. We
propose that one lease for room 111 in the Civic Center Courthouse and one for rooms 106 and 116
in the Hall of Justice be given.
If you need additional information, please call Jean Medlar at 554-9887.
cc Anna Weinstein, Associate Budget Analyst
(415)554-9850
PAX: (415) 552-9216
Off lea of the Director of Property •uMWLwsAKnLo.-cuiMHCJcxv ***!!»•»*■
25 Von Naaa Avinut, Suits 400 San Francisco, 94102
11
TOTAL P. 02
Memo to Finance Committee
February 14, 2001 Finance Committee Meeting
Item 3 - File 00-0111
Departments:
Item:
Location:
Lessor:
Lessee:
Administrative Services Department
Real Estate Division (RED)
Resolution authorizing and approving a new lease of City-
owned space located on the first floor of the Civic Center
Courthouse, 400 McAllister Street, to the Northern
California Service League.
Room 111 of the Civic Center Courthouse located at 400
McAllister Street.
City and County of San Francisco
Northern California Service League
No. of Sq. Ft. and
Cost Per Year Payable
by the Lessee to
the City:
Purpose of Lease:
Term of Lease:
Right of Renewal:
Utilities Provided
By Lessor:
Janitorial Services
Provided by Lessee:
Description:
1,760 sq. ft. at $1.00 per year.
Space for a Children's Waiting Room for children whose
parents have business with the Superior Court. The
Northern California Service League has currently
occupied the subject 1,760 sq. ft. of City-owned space at
400 McAllister Street without any type of lease
agreement in place since 1998.
March 1, 2001 through February 28, 2002 (one year)
The lessee has 9 consecutive one-year options to extend
the term of the lease.
The City will pay for all utilities.
The lessee will be responsible
within their leased space.
for janitorial services
The proposed resolution would authorize a one year lease
of 1,760 sq. ft. of City-owned space in Room 111 at the
Civic Center Courthouse to the Northern California
Service League. The Northern California Service League
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 14, 2001 Finance Committee Meeting
is a nonprofit organization that provides services to
persons in, and recently released from jail or prison. The
Northern California Service League has occupied Room
111 in the Civic Center Courthouse since 1998. According
to Ms. Jean Medlar of the Real Estate Division, since
1998, the subject property has been occupied without any
type of lease agreement, and no rent has been charged to
the Northern California Service League by the City to
date. According to Mr. Gordon Park-Li of the Trial Courts,
there is presently no authority for the Northern
California Service League occupying this space without
an agreement in place and with no rental charge being
paid to the City.
The Northern California Service League operates the
Children's Waiting Room in Room 111 of the Civic Center
Courthouse. The Children's Waiting Room is a childcare
center for children whose parents have business with the
Superior Court. The Children's Waiting Room has two
staff members, one Coordinator and one Assistant, who
provide childcare to a maximum of 15 children at any
given time. Ms. Medlar reports that the Children's
Waiting Room is open for use between the hours of 8:30
a.m. to 12 p.m., and 1 p.m. to 4:30 p.m., Monday through
Friday, on days when the Superior Court is in session.
According to Ms. Medlar, the Children's Waiting Room is
available for use by persons using the Superior Court
(such as family court clients, criminal defendants and
jurors), at no charge, but is not available as a permanent
childcare facility for court employees.
Comments: 1. According to Ms. Medlar, the 1,760 sq. ft. of space at
the Civic Center Courthouse has a fair market value of
approximately $3.25 per sq. ft. per month, totaling
$68,640 in rent per year. Ms. Medlar states that because
the Children's Waiting Room provides a public benefit to
the City, the rent for the subject property to be paid by
the Northern California Service League to the City will be
$1.00 annually.
2. Item 2, File 01-0110, of this report to the Finance
Committee pertains to another lease of City-owned
property to the Northern California Service League for a
Children's Waiting Room in the Hall of Justice.
BOARD OF SUPERVISORS
BUDGET ANALYST
13
Memo to Finance Committee
February 14, 2001 Finance Committee Meeting
Recommendation: Approval of the proposed resolution is a policy matter for
the Board of Supervisors.
BOARD OF SUPERVISORS
BUDGET ANALYST
14
Memo to Finance Committee
February 14, 2001 Finance Committee Meeting
Item 4 - File 01-0146
Department:
Item:
Location:
Purpose of Lease:
Lessor:
Lessee:
No. of Sq. Ft. and
Cost Per Month:
Cost:
Increase in Cost:
Department of Public Health (DPH)
Department of Administrative Services, Real Estate Division (RED)
Resolution authorizing a new lease of space currently
occupied by the City on a month-to-month basis under the
provisions of a prior lease at 1360 Mission Street for a term
of three years commencing retroactively to July 1, 2000 at an
initial monthly rent of $8,000 per month for the Employee
Assistance Program of the Department of Public Health
1360 Mission Street, fourth floor
To provide space for the Department of Public Health's
Employee Assistance Program, which has been located in the
same space at 1360 Mission Street since 1990. The Employee
Assistance Program is currently on a month-to-month lease
as set forth in a holdover provision in the prior lease. The
Employee Assistance Program provides counseling to City
employees on personal issues affecting their ability to work.
VILO Properties, Inc.
City and County of San Francisco
2,911 square feet at approximately S2.75 per square foot per
month. The rent would be subject to an annual increase of
five percent each year over the three-year term of the lease.
$8,000 monthly, or $96,000 annually
Under the prior lease, which expired July 1, 2000, the City
paid a monthly rent of $3,847, or $46,164 annually. That
lease agreement contained a provision stating that rent
during a month-to-month holdover period would be charged
at 150 percent of the previous rent. Thus, the rent increased
as of June 30, 2000 from approximately $3,847 per month, or
$1.32 per square foot per month to $5,770 per month or $1.98
per square foot per month, or 150 percent of the prior rental
rate. The City has been paying this increased rental rate of
$3,847 per month since July 1, 2000. Under the proposed
lease, the rent would increase by an additional $2,230 per
BOARD OF SUPERVISORS
BUDGET ANALYST
15
Memo to Finance Committee
February 14, 2001 Finance Committee Meeting
Term of Lease:
Utilities and
Janitorial
Services:
Right of Renewal:
Source of Funds:
Description:
Comments:
month or $0.77 per square foot, or by 38.6 percent, from the
previous holdover rent of $5,770 per month, or $1.98 per
square foot, to $8,000 per month, or $2.75 per square foot.
The prior 10 year and two month lease began on April 1,
1990 and ended June 30, 2000.
July 1, 2000 through June 30, 2003 (three years).
Landlord to pay for all utilities and services.
Two three-year options to renew after the expiration of the
initial term of the three-year lease, with the rent to be set at
95% of the market rate1.
DPH's FY 2000-2001 budget, as previously approved by the
Board of Supervisors.
According to Ms. Judy Schutzman of DPH, the proposed
leased premises would continue to be occupied by a total of
six staff members of the DPH Employee Assistance Program.
These six staff members provide free individual and group
counseling to employees of the City and County of San
Francisco for personal issues that effect their ability to work.
Counseling includes topics such as communication and
conflict resolution, anger management, stress management,
separation and divorce, balancing work and family issues,
and dealing with difficult people.
1. According to Ms. Schutzman, approximately 30 percent or
873 of the 2,911 square foot office at 1360 Mission Street is
made up of individual and group counseling areas used to
service clients of the Employee Assistance Program.
Additionally, the Employee Assistance Program currently
employs one full time consultant, and typically has between
one and four interns working at 1360 Mission space at any
given time. The balance of approximately 70 percent or 2,038
1 The prevailing market rate would be determined pursuant to a provision in the subject proposed
lease that would require that (1) the landlord propose a rate as the prevailing market rate, (2) the
City make a counter-proposal if the proposed rate is not agreeable, (3) if no agreement is reached,
both parties meet no less than twice to attempt to resolve any disagreement, and (4) if disagreements
are not resolved, both parties participate in a process to select a neutral appraiser, whose appraisal
would then be considered the prevailing market rate.
BOARD OF SUPERVISORS
BUDGET ANALYST
16
Memo to Finance Committee
February 14, 2001 Finance Committee Meeting
square feet of space is typically occupied by eight to 11
employees, providing an average of approximately 185 to 255
square feet per employee.
2. Mr. Alms advises that since the proposed rental rate of
$2.75 per square foot was negotiated in October of 2000, the
commercial real estate market has softened somewhat.
However Mr. Alms advises that the proposed rental rate of
$2.75 is still considered equal to or below current fair market
value which Mr. Alms estimates to be approximately $3.00
per square foot per month. Mr. Alms notes that the second
floor (the Employee Assistance Program is located on the
fourth floor) in the subject building at 1360 Mission Street
rented at a rate of approximately $3.25 per square foot per
month2 as recently as November 15, 2000.
3. According to Mr. Alms, the lease period would officially
commence retroactive to July 1, 2000, approximately eight
months prior to approval of the Board of Supervisors,
because the landlord, VILO Properties made the retroactive
commencement date of July 1, 2000 a condition of entering
into the lease agreement. Mr. Alms notes that negotiations
over the proposed new lease commenced well before the end
of the original lease on June 30, 2000. However a final
agreement with the landlord was only reached in January of
2001.
4. Under the proposed lease, the City would be required to
pay the lessor the difference between the current monthly
rent of $5,770 and the proposed monthly rent of $8,000, an
increase of 38.6 percent or $2,230, retroactive to July 1, 2000.
If the proposed lease were approved by the Board of
Supervisors on or about March 1, 2000, the City would be
required to pay VILO Properties a total retroactive payment
of $17,840 ($2,230 multiplied by eight months).
5. The proposed lease includes a provision allowing the
landlord to terminate the lease at any time after September
30, 2002 by providing the City with nine months notice.
According to Mr. Alms, a real possibility exists for the
2 According to Mr. Alms, the base rent of this space was $3.00 per square foot per month. However,
the tenants are required to pay utilities and services in that lease, which brings the cost of occupying
that space to a minimum of $3.25 per square foot per month, according to Mr. Alms. Under the
subject proposed lease, the landlord would pay all utilities and services.
BOARD OF SUPERVISORS
BUDGET ANALYST
17
Memo to Finance Committee
February 14, 2001 Finance Committee Meeting
Recommendation:
landlord to exercise this termination provision, because a
non-profit public housing company, Mercy Housing
Corporation, owns property surrounding 1360 Mission Street,
and has tentative plans to develop the area for low- and
middle-income housing. Mr. Alms advises that such
development would include the subject leased premises, if
VILO Properties elected to sell the premises to the Mercy
Housing Corporation. Mr. Alms notes, however, that it is his
understanding that Mercy Housing Corporation's plans are
currently not final, and that no development schedule has
been developed.
Approval of the proposed resolution is a policy matter for the
Board of Supervisors since, without first obtaining Board of
Supervisors approval: (a) DPH and the Real Estate Division
are requesting approval of the proposed lease retroactive to
July 1, 2000 and (b) such retroactivity results in the City
being required to pay an increase of 38.6 increase in rent
retroactive to July 1, 2000, resulting in a total estimated
retroactive payment of $17,840 from July 1, 2000 through
February 28, 2001.
[arvey M. Rose
Supervisor Leno
Supervisor Peskin
Supervisor Gonzalez
Clerk of the Board
Controller
Steve Kawa
BOARD OF SUPERVISORS
BUDGET ANALYST
18
[All Committees]
Government Document Section
City and County of Sian Francisco Main Library
Meeting Minutes
. Finance Committee wi™™™
Members: Supervisors Mark Leno, Aaron Peskin and Matt Gonzalez
Clerk: Gail Johnson
Wednesday, February 21, 2001
10:00 AM
Regular Meeting
City Hall, Room 263
Members Present: Mark Leno, Aaron Peskin, Matt Gonzalez.
MEETING CONVENED
The meeting convened at 10:06 a.m.
010039 [Airport Lease Agreement Modification for United Airlines, Inc.]
Resolution approving Lease Modification Number Three for Lease No. 73-0066 between United Airlines, Inc.
and the City and County of San Francisco, acting by and through its Airport Commission. (Airport Commission)
1/2/01, RECEIVED AND ASSIGNED to Finance and Labor Committee.
2/1/01, TRANSFERRED to Finance Committee. New committee structure.
2/7/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; John Martin, Airport Director; Theodore Lakey,
Deputy City Attorney; Gary Franzella, Assistant Deputy Airport Director, Aviation Management, Airport.
Continued to February 2 1 , 2001 .
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Peter Nardoza, Deputy Airport Director for
Public Affairs.
CONTINUED TO CALL OF THE CHAIR by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
010052 [Airport Lease Agreement for Plot 6 to United Airlines, Inc.]
Resolution approving lease agreement for Plot 6 between United Airlines, Inc. and the City and County of San
Francisco, acting by and through its Airport Commission. (Airport Commission)
1/10/01, RECEIVED AND ASSIGNED to Finance and Labor Committee.
2/1/01, TRANSFERRED to Finance Committee. New committee structure.
2/7/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; John Martin, Airport Director; Theodore Lakey,
Deputy City Attorney.
Continued to February 2 1 , 200 1 .
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Peter Nardoza, Deputy Airport Director for
Public Affairs.
CONTINUED TO CALL OF THE CHAIR by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
DOCUMENTS DEPT.
PR
B 2 2
*■ -
S/W FRAN: I
PUBLIC
City and County of San Francisco
Printed at 7:31 P\f on 2/22/01
Finance Committee
Meeting tiliutta
February' 21, 2001
010161 [Airport Concession Lease|
Resolution approving the Boarding Area "F" Cosmetic and Toiletries Lease between Buth-Na-Bodhaige, Inc.
dba The Body Shop, and the City and County of San Francisco, acting by and through its Airport Commission.
(Airport Commission)
1/29/01, RECEIVED AND ASSIGNED to Finance Committee.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Cathy Widener, Government Affairs
Administrator, Airport.
Amended on line 3, after "approving, " and on line 15, after "approve, " by adding "retroactively. "
AMENDED.
Resolution approving, retroactively, the Boarding Area "F" Cosmetic and Toiletries Lease between Buth-Na-
Bodhaige, Inc. dba The Body Shop, and the City and County of San Francisco, acting by and through its
Airport Commission. (Airport Commission)
RECOMMENDED AS AMENDED., by the following Note:
Ayes: 3 - Leno, Peskin, Gonzalez
010061 [Substance Abuse and Crime Prevention Trust Fund and Designation of Lead Agency)
Mayor, Supervisors Newsom, Maxwell, Hall, McGoldrick, Daly, Leno, Peskin
Ordinance adding Section 10.1 17-126 of the San Francisco Administrative Code establishing fund for deposit
of sums received under the Substance Abuse and Crime Prevention Act of 2000, and designating the
Department of Public Health as the lead agency for administration of the fund.
1/16/01, ASSIGNED UNDER 30 DAY RULE to Finance and Labor Committee, expires on 2/15/2001.
2/1/01. TRANSFERRED to Finance Committee New committee structure.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Monique Zmuda, Director of Finance,
Department of Public Health; Theodore Lakey, Deputy City Attorney; Edward Harrington, Controller.
Supervisor Peskin requested to be added as a co-sponsor.
AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE.
Ordinance adding Section 10.100-221 of the San Francisco Administrative Code establishing fund for deposit
of sums received under the Substance Abuse and Crime Prevention Act of 2000, and designating the
Department of Public Health as the lead agency for administration of the fund.
RECOMMENDED AS AMENDED by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
010272 [Appropriation, funding for earthquake relief to El Salvador]
Mayor, Supervisor Sandoval
Ordinance appropriating 5100,000 from the General Fund Reserve for the Salvadorian Emergency Committee
to provide earthquake relief for fiscal year 2000-01.
2/12/01, RECEIVED AND ASSIGNED to Finance Committee
Heard in Committee. Speaker: Harvey Rose, Budget Analyst.
RECOMMENDED by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
City and County of San Francisco
Printed at 7i32 PM on 2A2/01
Finance Committee
Meeting Minutes
February 21, 2001
010108 [Fund the development and implementation of Reengineering Plan for the Assessor's Office Efficiency
Program]
Ordinance appropriating 5726,726 of the General Reserve to fund the implementation of Reengineering Plan,
for the Assessor's Office for fiscal year 2000-01. (Assessor-Recorder)
1/17/01, CONTINUED TO CALL OF THE CHAIR. Divided from File 002087.
1/17/01, RECEIVED AND ASSIGNED to Finance and Labor Committee.
2/1/01, TRANSFERRED to Finance Committee. New committee structure.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Doris Ward, Assessor-Recorder; Debbie Liu,
KPMG Consulting; Jim Janette, Assistant Assessor; Rubin Goodman.
CONTINUED TO CALL OF THE CHAIR by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
010208 [Government funding, Hetch Hetchy's power purchases]
Ordinance appropriating $25,400,000 of Hetch Hetchy Operating Fund to fund the purchase of power to meet
municipal and contractual obligations for fiscal year 2000-01. (Controller)
(Fiscal impact.)
1/31/01, RECEIVED AND ASSIGNED to Finance Committee.
Heard in Committee. Speakers: None.
Continued to 2/28/01.
CONTINUED by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
002067 [Library Fines and Fees]
Supervisor Newsom
Ordinance amending the San Francisco Administrative Code by adding Section 8.21-2 to authorize the Library
Commission to charge certain fines and fees for the use of library materials and services and ratifying prior
fines and fees.
1 i/20/00, ASSIGNED UNDER 30 DAY RULE to Audit and Government Efficiency Committee, expires on 12/20/2000. Sponsor
Supervisor Kaufman
1/2/01, RECOMMENDED AS COMMITTEE REPORT. Heard in Committee. Speakers: Susan Hildreth, City Librarian; Supervisor
Katz; Peter Warfield.
To Board as Committee Report January 2, 2001 .
1/2/01 , PASSED, ON FIRST READING. Supervisor Newsom requested to be added as co-sponsor.
1/16/01 , SEVERED FROM CONSENT AGENDA. Supervisor Yee requested this matter be severed so it could be considered separately.
1/16/01, RE-REFERRED to Audit and Government Efficiency Committee.
2/1/01, TRANSFERRED to Finance Committee. New committee structure.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Susan Hildreth, Acting City Librarian;
Dorothy Copely, Public Library; Edward Harrington, Controller; George Nichols, Finance Director, Public
Library; James Chafee; Theodore Lakey, Deputy City Attorney; Peter Warfield; Nicole Termini; Deetje Boler;
Michael Farrah, Legislative Assistant to Supervisor Newsom.
Continued to 2/28/01.
CONTINUED by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
City and County of San Francisco
Printed at 7:32 PM on 2/22/01
Finance Committee Meeting Minutes February 21, 2001
ADJOURNMENT
The meeting adjourned at 1:06 p.m.
City and County of San Francisco 4 Printed at 7:32 PM on 1/2ZV1
T
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A-/
CITY AND COUNTY
[Budget Analyst Report]
Susan Horn
Main Library-Govt. Doc. Section
OF SAN FRANCISCO
BOARD OF SUPERVISORS
BUDGET ANALYST
1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642
FAX (415) 252-0461
February 15, 2001
TO:
FROM
Finance Committee
- Budget Analyst
SUBJECT: February 21, 2001 Finance Committee Meeting
Item 1 - File 01-0039
Note
DOCUMENTS DEPT.
FEB 2 2 2001
SAN FRANCISCO
pUBLIC LIBRARY
This item was continued by the Finance Committee at its meeting of
February 7, 2001.
Department:
Item:
Lessor:
Lessee:
Term of Lease:
Right of Renewal:
Description:
Airport
Resolution approving Lease Modification No. 3 for Lease
No. 73-0066 between United Airlines, Inc. and the City,
acting by and through its Airport Commission.
City and County of San Francisco
United Airlines, Inc.
The subject lease was first approved in 1973 for an initial
20-year term, to expire in 1993, with two 10-year options at
the discretion of the lessee.
As noted above, the 20-year lease provided for two 10-year
extensions at the discretion of the lessee, for a total lease
period of up to 40 years. In 1993, United Airlines exercised
its first 10-year extension, which is due to expire in 2003.
On December 5, 2000 the Airport Commission approved
Modification No. 3 of Lease 73-0066 between the Airport
and United Airlines, Inc. Under lease 73-0066, United
Airlines currently occupies 129.75 acres of land used by
United Airlines for employee parking and its Maintenance
Operations Center (MOC) for aircraft maintenance. The
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
subject lease was originally approved in 1973 for an initial
term of 20 years, with two 10-year extension options at the
discretion of the lessee. According to Ms. Dorothy Schimke
of the Airport, in 1993 United Airlines exercised its first
ten-year option, which is due to expire on June 30, 2003.
The property leased by United Airlines is located at the
intersection of San Bruno Avenue and the Bayshore
Freeway.
The Airport is currently developing a Multi-Modal
Transportation Center, which includes, among other
elements, expansion of short-term Parking Lot DD, which
is adjacent to the property leased by United Airlines, and
the extension of the Air Train (the Airport light rail system)
to the Multi-Modal Transportation Center and Parking Lot
DD (see Attachment I, provided by the Airport, for a
description of these projects). According to Ms. Schimke,
Parking Lot DD currently consists of Airport employee and
Airport tenant employee parking. Ms. Schimke advises that
Parking Lot DD will be expanded and initially used for
additional employee parking, and upon completion of the
Multi-Modal Transportation Center, the expanded portion
of Parking Lot DD would be converted for long-term public
parking. Ms. Schimke advises that in order for the Airport
to complete such an expansion, the Airport needs access to
Parking Lot DD through a portion of the property currently
leased by United Airlines. Under the proposed Modification
No. 3 to Lease 73-0066, United Airlines has agreed to
relinquish to the Airport 0.74 acres of property. In return,
the Airport has agreed to provide United Airlines with
additional space of up to 2.61 acres for employee parking,
as discussed below.
The proposed transfer of acreage under the subject lease
Modification No. 3 would take place in the two following
phases:
(1) Ms. Schimke reports that on December 1, 2000, United
Airlines relinquished 0.74 of its total 129.75 in leased
property back to the Airport, leaving 129.01 acres under
the subject lease with United Airlines (see Comment No.
2).
(2) In exchange for relinquishing the 0.74 acres discussed
above, the Airport agreed to provide United with 150
BOARD OF SUPERVISORS
BUDGET ANALYST
2
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
Rent paid by
United Airlines
to the Airport:
additional parking spaces for United Airlines employees
that will be added to the lease at a future date, totaling
a maximum of 2.61 acres. However, Ms. Schimke
advises that the amended lease with the Airport will not
include the additional acreage until the Airport
completes the Multi-Modal Transportation Center and
the AirTrain, in approximately four to six years, as
explained in Attachment I to this report. During the
interim period, between the time that United Airlines
relinquished 0.74 acres of space on December 1, 2000
and the completion of the Multi-Modal Transportation
Center and the AirTrain Extension, the Airport has
granted United Airlines a month-to-month permit,
effective December 1, 2000, for approximately 2.61 acres
to accommodate the additional employee parking.
Because the guideway for the AirTrain will require use
of part of the 2.61 acres, the Airport will not be able to
determine the exact amount of additional space that will
be added to the existing lease until the Multi-Modal
Transportation Center and the AirTrain are completed.
Therefore, proposed lease Modification No. 3 states that
the Airport and United Airlines agree to expand the
existing lease "after the Multi-Modal Transportation
Center and the AirTrain Extension are completely
designed and constructed... without the requirement of
formal amendment to the Lease or the approval of any
party... as to the dimensions and configuration of such
space."
Rent for the additional space to be charged by the Airport
to United Airlines will be at the same rate of $35,879.50
per acre charged for the existing lease, both when the space
is under permit and after it is added to the lease. The rate
of $35,879.50 first became effective in 1998, according to
Ms. Schimke.
Ms. Schimke advises that when the first 10-year lease
extension with United Airlines was negotiated in 1993,
United Airlines and the Airport agreed to an annual rent of
$32,617.73 per acre for the first five years of the 10-year
extension, with one increase of $3,261.77 to an annual rent
of $35,879.50, effective July 1, 1998, for the remaining five
years of the 10-year extension, expiring on June 30, 2003.
Therefore, during the first 10-year extension between 1993
BOARD OF SUPERVISORS
BUDGET ANALYST
3
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
Permit:
Compliance with
City Laws:
Comments:
and 2003, the rent charged to United Airlines will have
increased by only approximately 10 percent, or by
approximately an average of one percent per year.
Under the proposed lease Modification No. 3, the exchange
in space would result in a maximum net increase of 1.87
acres used by United Airlines in this location (the 2.61
acres in new parking for United Airlines employees, less
the 0.74 acres relinquished back from United Airlines to
the Airport).
According to Ms. Schimke, the month-to-month permit
granted to United Airlines for the 2.61 acres allows the
Airport to modify or terminate the permit with 30-days
notice. Ms. Schimke advises that since the Airport must use
portions of the 2.61 acres under permit to United Airlines
for construction of the AirTrain extension, the Airport will
reduce the number of acres provided to United Airlines
under permit as needed.
In addition, the proposed lease Modification No. 3 would
update the existing lease to reflect changes to the
Administrative Code and other City requirements, such as
provisions requiring compliance with the ban on tropical
hardwoods and virgin redwood, the MacBride Principles
related to employment inequity in Northern Ireland, the
Non-Discrimination in City Contracts and Equal Benefits
Ordinance, and the Minimum Compensation Ordinance.
1. As previously noted, the proposed lease modification
would ultimately result in a maximum net increase of 1.87
acres of space for United Airlines. The net rent increase
that the Airport would receive annually from United
Airlines is $67,095 per year, as shown in the table below.
However, the increased acreage to be added to the lease
will most likely be less than the estimated 1.87 acres since
the parking parcel now under permit will be reduced by
AirTrain construction as described above. Ms. Schimke
advises that the Airport will not add more than 2.61 acres
to the lease with United Airlines. The estimated net
increased rent of $67,095 to be paid by United to the
Airport is shown in the table below. The net increased rent
applies immediately to the estimated 2.61 acres provided to
United Airlines under a month-to-month permit effective
BOARD OF SUPERVISORS
BUDGET ANALYST
4
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
December 1, 2000, as well as to the final acreage after it is
incorporated into the existing lease. As stated previously,
Ms. Schimke reports that the Airport expects to complete
the Multi-Modal Transportation Center and the AirTrain
Extension in approximately four to six years, as stated in
Attachment I, provided by the Airport.
Annual Cost
per Acre
Total
Acres
Annual
Airport Revenues
Existing Lease
$35,879.50
129.75
4,655,365
Space relinquished by
United Airlines to
the Airport
$35,879.50
(0.74)
(26,550)
Estimated additional space
to be leased by
United Airlines
$35,879.50
2.61
93,645
New Total
131.62
$4,722,460
Net Increase "
1.87
$67,095 1
2. As stated previously, Ms. Schimke advises that on
December 1, 2000, United Airlines relinquished 0.74 acres
of space leased under the existing contract. In addition, the
Airport issued to United Airlines a permit, effective
December 1, 2000, to use an additional 2.61 acres for
employee parking, at which point United Airlines began
paying additional rent to the Airport based upon the
additional 2.61 acres. Therefore, the Budget Analyst
recommends that the subject resolution be amended to
provide for retroactive authorization. Ms. Schimke advises
that the permit to United for use of the 2.61 acres will be
terminated when the space is formally incorporated into
the existing lease.
3. As noted above, United Airlines will be charged rent for
the additional 2.61 acres at the same rate of $35,879.50 per
acre charged for the existing lease both when the space is
under permit and after it is added to the lease. Ms.
Schimke advises that the rate of $35,879.50 first became
effective July 1, 1998. The Budget Analyst notes that not
only has this rent of $35,879.50 per acre not been increased
since July 1, 1998, or for 2.5 years, but additionally, over
the 10-year lease extension, which expires June 30, 2003,
the rental increases to United Airlines in total have
BOARD OF SUPERVISORS
BUDGET ANALYST
5
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
averaged approximately one percent per year over 10 years,
or a total increase of $3,261.77, which adjusted the 1993
rent of $32,617.73 per acre to the current rent of $35,879.50
per acre.
Had this rent amount been adjusted upward according to
the total 11.24 percent increase in the Consumer Price
Index (CPI) between July 1, 1998 and January 2001, the
rent would have increased by $4,302.86 to an annual rent
of $39,912.35 per acre. Furthermore, the Budget Analyst
questions why the Airport does not require that United
Airlines pay the Airport an adjusted rent based on current
fair market rent for the net additional 1.87 acres to be used
by United Airlines (the 2.61 acres in new employee parking
for United Airlines, less the 0.74 acres relinquished back by
United Airlines to the Airport).
According to Ms. Schimke, the Airport agreed to the
proposed exchange of property with United Airlines and the
rental rate of $35,879.50 because the 0.74 acres United
Airlines has relinquished to the Airport is critical to the
completion of the Air Train Extension and the Multi Modal
Center. The Budget Analyst notes, however, that the net
additional 1.87 acres provided to United Airlines for
employee parking is apparently important to United
Airlines since United Airlines has requested the additional
land from the Airport. Therefore, the Budget Analyst
questions why the Airport does not require United Airlines
to pay the current fair market value for the additional land
that United will receive and why the rent being charged to
United Airlines has only been increased by an average of
one percent annually over the 10-year lease extension
period, which expires on June 30, 2003.
4. Ms. Schimke also states that the original 1973 lease with
United Airlines contains no provisions for annual
adjustments in rent during the initial 20-year term of the
lease, or during each of the subsequent two 10-year
extension periods. As discussed in Comment No. 3 above,
the existing lease provides that before each of the 10-year
extensions, the Airport and United Airlines will negotiate a
revised rent based upon Airport appraisals of the land's fair
market value at that time.
BOARD OF SUPERVISORS
BUDGET ANALYST
6
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
5. In response to the Budget Analyst's report, Ms. Schimke
advises that the Airport has negotiated the proposed lease
Modification No. 3 to accommodate the Airport. The Airport
went to United Airlines with the request for the Airport to
take back from United Airlines 0.74 acres of property to
which United had absolute rights under its long-term lease,
according to Ms. Schimke. The Airport's providing of up to
2.61 acres of Airport property to United Airlines, which
would enable United Airlines to provide its employees an
additional 150 parking spaces at the same rate of the
existing lease, was the 'price' for United Airline's
agreement to relinquish the 0.74 acres back to the Airport,
according to Ms. Schimke. Ms. Schimke states that the
Airport was not in a bargaining position to demand pricing
concessions from United as part of this deal. Ms. Schimke
reiterates that the 0.74 acres that the Airport will obtain
from United Airlines is necessary for the completion of the
Airport's Multi-Modal Transportation Center and AirTrain
extension (light rail system). In addition to the important
public policy goals of the Multi-Modal Transportation
Center, according to Ms. Schimke, the Parking Lot DD
portion of the project (see Attachment I) has significant
revenue implications. Ms. Schimke anticipates that the
expansion of Parking Lot DD (the expansion will initially
be used for Airport employee parking and Airport tenant
employee parking, and eventually for public long-term
parking) allowed by the recapture of the 0.74 acres from
United Airlines will generate additional parking revenues
to the Airport conservatively estimated at $1,017,600 for
the first full year of operation, rising to approximately $3
million per year when the lot reaches capacity. Ms.
Schimke advises that these parking revenues will increase
significantly once the lot converts the Airport employee and
Airport tenant employee parking to pub He long-term
parking when the Multi-Modal Transportation Center is
completed.
6. Under the terms of the lease, not until the current 10-
year lease extension expires on June 30, 2003 will the
Airport, in conjunction with the Department of Real
Estate, appraise the value of the land and negotiate with
United Airlines a revised rent based upon the land's fair
market value at that time, as of July 1, 2003.
7. As previously noted, in 1993, under the first 10-year
extension, the Airport and United Airlines negotiated an
BOARD OF SUPERVISORS
BUDGET ANALYST
7
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
adjusted rent for this first 10-year extension, effective July
1, 1993, to increase the annual rent by $3,261.77, from
$32,617.73 per acre to $35,879.50 per acre annually,
effective July 1, 1998. This one and only rent increase
represents an average increase of only one percent
annually, or a total increase of 10 percent over the 10-year
lease extension. This mid-term adjustment was not
intended to reflect fair market value at mid-term, according
to Ms. Schimke. While the Budget Analyst acknowledges
that the 1973 original lease contained no provisions for
annual rent adjustments, nothing precludes the Airport
from negotiating a rent adjustment at this time, since the
Airport is requesting approval from the Board of
Supervisors of a proposed new lease Modification No. 3,
which would provide United Airlines with 1.87 additional
acres of Airport property.
8. At the February 7, 2001 Finance Committee meeting, the
Airport Director stated that in negotiating the proposed
lease modification with United Airlines, the Airport took
into consideration an additional $220,000 for security and
related costs that United Airlines reports it would be
required to pay to operate the additional 2.61 acres
provided under the subject lease modification. According to
Mr. Gary Franzella of the Airport, United Airlines reports
that the $220,000 in additional costs would result from the
need to provide two security guards on the premises, seven
days a week, which would require United Airlines to
employ six full-time equivalent (FTE) employees.
9. At its meeting of February 7, 2001, the Finance
Committee requested the Airport Director to attempt to
renegotiate the proposed lease modification in order to
require United Airlines to pay to the Airport Consumer
Price Index adjustments and/or fair market value for the
subject 2.61 acres.
As of the writing of this report, according to Mr. Peter
Nardoza of the Airport, the Airport has not yet been in
contact with representatives of United Airlines concerning
a possible renegotiation of this lease modification, as
requested by the Finance Committee. Therefore, Mr.
Nardoza is requesting that this item be continued for two
weeks.
BOARD OF SUPERVISORS
BUDGET ANALYST
8
FEB 2 2 2001
SAN FRANCISCO
PUBLIC LIBRARY
Memo to Finance Committee REVISED 2/16/01
February 21, 2001 Finance Committee Meeting Item 1 ~ File 01-0039
Note: Subsequent to the issuance of the Budget Analyst's report, the Airport revised the amount of the net
revenue realized by the Airport from long term public parking spaces from their previously reported S3 1 8
per month to S222 per month. This does not change the conclusions of the Budget Analyst.
10. The Finance Committee also requested at its February
7, 2001 meeting that the Budget Analyst attempt to
determine a fair market value for the 150 parking spaces to
be used for United Airlines employee parking in the 2.61
acres of additional space to be provided to United Airlines
under the proposed lease modification.
According to the Ms. Schimke, the Airport currently
charges $48 per parking space permit, per month, or $576
annually, for comparable space used by airlines for
employee parking (parking with no bus service), which the
Airport provides to airlines on a per space permit basis. Ms.
Schimke advises that this rate is based on the Airport's
Rates and Charges for Airlines, which is adjusted and
published annually by the Airport. Since the Airport can in
some cases rent on average two permits per parking space
(since the Airport is open 24 hours per day), the average
monthly value of a parking space for airline employees is
$96 per month, according to Mr. Franzella. At this rate of
$96 per month, the total value of the 150 subject parking
spaces would be $14,400 per month, or $172,800 annually.
Under the proposed lease modification, based on the
$93,645 rental revenue per year payable by United Airlines
to the Airport for the 2.61 acres which provide United
Airlines with 150 parking spaces, United Airlines would
pay to the Airport an average of approximately $52.03 per
month per parking space, or approximately $7,804 per
month ($93,645 annually) for the entire 2.61 acres. This
$52.03 is approximately $43.97 less per parking space per
month ($96 less $52.03) than the average monthly rate of
$96 per month per parking space that the Airport is
currently charging for airline employee parking. Ms.
Schimke advises that in addition to the 150 parking spaces,
the subject 2.61 acres includes circulation space for
vehicles. Under the subject lease and proposed
modification, United Airlines would not be able to
reconfigure the parking layout to create additional parking
spaces, according to Mr. Franzella.
Furthermore, based on a comparison of parking available in
the general vicinity of the Airport, CalTrans currently
charges on average $61 (approximately $59 to $63 per
month) for leased paved parking spaces approximately the
same size as the subject 150 parking spaces to be provided
BOARD OF SUPERVISORS
BUDGET ANALYST
9
idget Analyst Report]
isan Horn
3in Library-Govt. Doc. Section
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
to United Airlines at the Airport1), according to information
provided to the Budget Analyst by the Division of Real
Estate.
In addition, if the Airport were to have to dedicated the
2.61 acre area for public parking use instead of for United
Airlines employee parking, which in fact the Airport
intends to eventually do in its Parking Lot DD, which is
adjacent to the 2.61 acres being provided to United
Airlines, then the Airport could have charged its current
rate of $15 per day per space2 for long-term public parking,
or approximately $450 per month ($5,400 annually),
according to Ms. Schimke. The Airport collects an average
net revenue of $222 per parking space per month ($2,664
annually) from long-term public parking, accounting for
operating costs and fluctuations in demand, according to
Mr. Franzella. Mr. Franzella advises that the Airport
would not have elected to use the subject 2.61 acres for
long-term public parking due to the property's location and
the investment that would have been required to construct
the infrastructure necessary for long-term parking.
A comparison of such parking charges are as follows:
Parking Use
Monthly Rate
Charged per
Space
Total Annual
Rent for
150 Spaces
Proposed Lease Modification.
2.61 acres including 150 parking spaces for the
proposed rent being charged to United
$52.03
593,645
CalTrans Leased Parkine Space
in Vicinity of Airport (average rent)
for 150 parking spaces
S61
S109.800
Comparable Charges by the Airport for
Airline Employee Parking for 150 parking spaces
(provided per space, based on two permits each)
$96
$172,800
Long-Term Airport Public Parking
(Approximate Net Revenue for Airport
for 150 parking spaces)
$222
$399,600
1 The Real Estate Division reports that CalTrans pays a maximum of 50.20 per square foot of
comparable paved parking, which when multiplied by the average Airport-reported 315 square-feet
of each of the subject 150 parking spaces, would result in a monthly parking rate of S63.
2 Ms. Schimke advises that the Airport charges for long-term parking SI for every 15
minutes, with a maximum daily fee of $15.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
As shown in the above table:
• Based on 150 parking spaces, the proposed $93,645
annual rent to be charged to United Airlines under the
proposed subject lease modification would be $16,155
less than the approximate annual rent of $109,800
charged by CalTrans for similar parking spaces in the
vicinity of the Airport.
• Moreover, according to the Airport, the annual $93,645
rent to be charged to United Airlines under the proposed
subject lease modification charged for the subject 150
parking spaces under the proposed lease modification,
including additional vehicle circulation space, would be
$79,155 less than the $172,800 annual amount charged
by the Airport per space (based on an average of 2
permits per space) to airlines for permits for airline
employee parking.
• Further, the proposed annual rent of $93,645 to be
charged by United Airlines under the proposed subject
lease modification would be $305,955 less than the
estimated $399,600 in net revenue that the Airport
earns from 150 long-term parking places, not accounting
for any initial investment costs which would be required
by the Airport for long-term parking.
11. Based on the data obtained in response to the Finance
Committee's question concerning the value of parking
spaces included in the proposed lease with United Airlines:
a) under the proposed lease modification the rent charged
to United Airlines of $52.03 monthly for each of the 150
parking spaces would be 14.7 percent less than
comparable parking in the vicinity of the Airport of
approximately $61 monthly for the parking leased by
CalTrans and 45.8 percent less than the monthly $96
the Airport currently charges Airlines per employee
parking space, based on an average of two permits per
space; and,
b) under the proposed lease modification the rent charged
to United Airlines of $52.03 monthly for each of the 150
parking spaces would be 76.6 percent less than the
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
average $222 monthly net revenue per space that the
Airport currently receives for long-term Airport public
parking.
12. The Budget Analyst based the above calculations on the
assumption that, under the proposed lease modification,
the United Airlines would be provided 150 new parking
spaces, based upon information received from the Airport.
However, the Airport now advises that United Airlines will
receive a net total of 75 new parking spaces (the 150
parking spaces provided in the subject 2.61 acres less 75
parking spaces under the 0.74 acres which United Airlines
has agreed to relinquish to the Airport under the proposed
lease modification.) According to Mr. Franzella, the Budget
Analyst should consider the land value of the subject 2.61
acres based on the value of 75 parking spaces, as opposed to
150 parking spaces. However, if a comparison of 75 parking
spaces, instead of 150 were made, the relationship between
the individual parking space valued in this analysis would
remain identical. Furthermore, we disagree with Mr.
Franzella. The analysis by the Budget Analyst addresses
the fair market value of the new space that will now be
leased to United Airlines that includes 150 parking spaces.
Recommendations: 1. Amend the proposed resolution to provide for retroactive
authorization, in accordance with Comment No. 2 above.
2. Approval of the proposed resolution, as amended, is a
policy matter for the Board of Supervisors since under the
proposed lease Modification No. 3, the Airport will not
receive current fair market value until July 1, 2003 and, as
the lease presently states, the Airport does not require
United Airlines to pay annual rent adjustments based on
annual percentage increases in the Consumer Price Index
(CPI) over the entire potential 40-year term of this lease. In
addition, the fair market value rates of the parking spaces
to be provided to United Airlines under the proposed lease
are considerably less than comparable parking rates that
could be received for parking as noted in Comments 10 and
11, above.
3. As requested by the Airport, continue this proposed
resolution for two weeks, in accordance with Comment No.
9 above.
BOARD OF SUPERVISORS
BUDGET ANALYST
1 9
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
10. The Finance Committee also requested at its February
7, 2001 meeting that the Budget Analyst attempt to
determine a fair market value for the 150 parking spaces to
be used for United Airlines employee parking in the 2.61
acres of additional space to be provided to United Airlines
under the proposed lease modification.
According to the Ms. Schimke, the Airport currently
charges $48 per parking space permit, per month, or $576
annually, for comparable space used by airlines for
employee parking (parking with no bus service), which the
Airport provides to airlines on a per space permit basis. Ms.
Schimke advises that this rate is based on the Airport's
Rates and Charges for Airlines, which is adjusted and
published annually by the Airport. Since the Airport can in
some cases rent on average two permits per parking space
(since the Airport is open 24 hours per day), the average
monthly value of a parking space for airline employees is
$96 per month, according to Mr. Franzella. At this rate of
$96 per month, the total value of the 150 subject parking
spaces would be $14,400 per month, or $172,800 annually.
Under the proposed lease modification, based on the
$93,645 rental revenue per year payable by United Airlines
to the Airport for the 2.61 acres which provide United
Airlines with 150 parking spaces, United Airlines would
pay to the Airport an average of approximately $52.03 per
month per parking space, or approximately $7,804 per
month ($93,645 annually) for the entire 2.61 acres. This
$52.03 is approximately $43.97 less per parking space per
month ($96 less $52.03) than the average monthly rate of
$96 per month per parking space that the Airport is
currently charging for airline employee parking. Ms.
Schimke advises that in addition to the 150 parking spaces,
the subject 2.61 acres includes circulation space for
vehicles. Under the subject lease and proposed
modification, United Airlines would not be able to
reconfigure the parking layout to create additional parking
spaces, according to Mr. Franzella.
Furthermore, based on a comparison of parking available in
the general vicinity of the Airport, CalTrans currently
charges on average $61 (approximately $59 to $63 per
month) for leased paved parking spaces approximately the
same size as the subject 150 parking spaces to be provided
BOARD OF SUPERVISORS
BUDGET ANALYST
9
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
to United Airlines at the Airport1), according to information
provided to the Budget Analyst by the Division of Real
Estate.
In addition, if the Airport were to have to dedicated the
2.61 acre area for public parking use instead of for United
Airlines employee parking, which in fact the Airport
intends to eventually do in its Parking Lot DD, which is
adjacent to the 2.61 acres being provided to United
Airlines, then the Airport could have charged its current
rate of $15 per day per space2 for long-term public parking,
or approximately $450 gross per month ($5,400 annually),
according to Ms. Schimke. The Airport collects an average
net revenue of $318 per parking space per month ($3,816
annually) from long-term public parking, accounting for
fluctuations in demand, according to Mr. Franzella. Mr.
Franzella advises that the Airport would not have elected
to use the subject 2.61 acres for long-term public parking
due to the property's location and the investment that
would have been required to construct the infrastructure
necessary for long-term parking.
A comparison of such parking charges are as follows:
Parking Use
Monthly
Rate
Charged
per Space
Total
Annual
Rent for
150 Spaces
Proposed Lease Modification,
2.61 acres including 150 parking spaces for
the proposed rent being charged to United
$52.03
$93,645
CalTrans Leased Parking Space in
Vicinity of Airport (average rent) for 150
parking spaces
$61
$109,800
Comparable Charges by the Airport for
Airline Employee Parking for 150 parking
spaces (provided per space, based on two
permits each)
$96
$172,800
Long-Term Airport Public Parking
(Net Revenue for Airport for 150 parking
spaces)
$318
$572,400
1 The Real Estate Division reports that CalTrans pays a maxim vim of SO. 20 per square foot of
comparable paved parking, which when multiplied by the average Airport-reported 315 square-feet
of each of the subject 150 parking spaces, would result in a monthly parking rate of $63.
2 Ms. Schimke advises that the Airport charges for long-term parking SI for every 15
minutes, with a maximum daily fee of $15.
BOARD OF SUPERVISORS
BUDGET ANALYST
10
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
As shown in the above table:
• Based on 150 parking spaces, the proposed $93,645
annual rent to be charged to United Airlines under the
proposed subject lease modification would be $16,155
less than the approximate annual rent of $109,800
charged by CalTrans for similar parking spaces in the
vicinity of the Airport.
• Moreover, according to the Airport, the annual $93,645
rent to be charged to United Airlines under the proposed
subject lease modification charged for the subject 150
parking spaces under the proposed lease modification,
including additional vehicle circulation space, would be
$79,155 less than the $172,800 annual amount charged
by the Airport per space (based on an average of 2
permits per space) by the Airport to airlines for permits
for airline employee parking.
• Further, the proposed annual rent of $93,645 to be
charged by United Airlines under the proposed subject
lease modification would be $478,755 less than the
estimated $572,400 in net revenue that the Airport
earns from 150 long-term parking places, not accounting
for any initial investment costs which would be required
by the Airport for long-term parking.
11. Based on the data obtained in response to the Finance
Committee's question concerning the value of parking
spaces included in the proposed lease with United Airlines:
a) the proposed lease modification which would result in a
rent charged to United Airlines of $52.03 monthly for
each of the 150 parking spaces would be 14.7 percent
less than comparable parking in the vicinity of the
Airport of approximately $61 monthly for the parking
leased by CalTrans and 45.8 percent less than the
monthly $96 the Airport currently charges Airlines per
employee parking space, based on an average of two
permits per space; and,
b) the proposed lease modification which would result in a
rent charged to United Airlines of $52.03 monthly for
each of the 150 parking spaces would be 83.6 percent
BOARD OF SUPERVISORS
BUDGET ANALYST
11
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
less than the average $318 monthly net revenue per
space which the Airport currently receives for long-
term Airport public parking.
12. The Budget Analyst based the above calculations on the
assumption that, under the proposed lease modification,
the United Airlines would be provided 150 new parking
spaces, based upon information received from the Airport.
However, the Airport now advises that United Airlines will
receive a net total of 75 new parking spaces (the 150
parking spaces provided in the subject 2.61 acres less 75
parking spaces under the 0.74 acres which United Airlines
has agreed to relinquish to the Airport under the proposed
lease modification.) However, this analysis by the Budget
Analyst addresses the fair market value of the new space
that will now be leased to United Airlines that includes 150
parking spaces.
Recommendations: 1. Amend the proposed resolution to provide for retroactive
authorization, in accordance with Comment No. 2 above.
2. Approval of the proposed resolution, as amended, is a
policy matter for the Board of Supervisors since under the
proposed lease Modification No. 3, the Airport will not
receive current fair market value until July 1, 2003 and, as
the lease presently states, the Airport does not require
United Airlines to pay annual rent adjustments based on
annual percentage increases in the Consumer Price Index
(CPI) over the entire potential 40-year term of this lease. In
addition, the fair market value rates of the parking spaces
to be provided to United Airlines under the proposed lease
are considerably less than comparable parking rates that
could be received for parking as noted in Comments 10 and
11, above.
3. As requested by the Airport, continue this proposed
resolution for two weeks, in accordance with Comment No.
9 above.
BOARD OF SUPERVISORS
BUDGET ANALYST
12
Attachment I
J^a^e 1 or 2
AIRPORT COMMISSION
SAN FRANCISCO INTERNATIONAL AIRPORT
CITY AND COUNTY OF SAN FRANCISCO
INTEROFFICE MEMORANDUM
TO: Harvey Rose DATE: January 24, 2001
Budget Analyst
A
FROM: Bob Rhoades Gc~'
Deputy Airport Director, Business
SUBJECT: Lot DD Development - MultiModal Transportation Center
Lot DD consists of a 3,21 S space parking garage for Airport and tenant employees under Airport
control. It also contains a secure 1,190 space, paved parking lot under long-term lease throueh
year 2013 to United Airlines ("UA") for UA employee parking. Access to the employee parking
garage is by way of a signalized entry/exit from South Airport Boulevard. Access to the UA
employee parking area is from a separate signalized entry/exit from South Airport Boulevard
with an additional (stop si^n controlled) exit onto westbound San Bruno Avenue. Shunle buses
transport employees to and from other Airport destinations.
The Airport intends to improve Lot DD as pan of a Multi-Modal Transportation Center
("MMTC") development. Under the "Transit First Policy adopted by the Airport Commission
in 1996, the Airport is committed to the development of a ground transportation system which
gives priority to alternate transit modes. As part of this commitment, the development of the
MMTC at Lot DD would provide a consolidated transportation connection for long-term airpon
parking, buses, and bicyclists, with access to the terminal complex. Toe MMTC would achieve a
number of transit first objectives, such as: 1) reduce vehicular travel to and congestion on the
passenger terminal roadways by providing direct access via AirTrain for remote long-term
parking sites; 2) encourage use of public transit by providing a direct connection between a new
SamTrans stop and AirTrain; 3) encourage bicycle commuting by providing an extension of the
Bay Trail, and new bicycle parking facilities with direct access to the terminal complex via
AirTrain.
Lot DD improvements will involve an extension of the AirTrain System (the Airpon lisht rail
system); two MMTC AirTrain Stations; construction of a link of the San Francisco Bay Trail-
and expansion of long-term parking facilities. The Lot DD improvements are broken into rwo
phases for implementation.
Phase I improvements include: paving an unimproved portion of the lot to add aporoximately
1,600 additional parking spaces to initially be used by employees; signalization improvements at
the intersections of South Airport Boulevard and the I-3S0 off and on-ramps; construction of the
Bay Trail link through Lot DD; and relocation of the parking lot exit onto San Bruno Avenue. A
contract is currently underway to make the first phase improvements.
. 13
. (•*■".*' Attachment I
•• 'i ••..-.- . fage 2 or 2
/••
Harvey Rose
January 24. 2001
Pas=2
Phase TI improvements include: the extension of the AirTrain System; construction of a second
parking structure; and the conversion of the employee parking lot and structures into lonp-term
parking facilities.
The only viable vehicular access to the new parking area being developed is through the United
Airlines' secure leasehold area. Without such access, the new surface parking area being
developed in Phase I would be unusable, making less long-term parking available in the future.
To obtain UA agreement to bisect their leasehold the Airport agreed to increase the UA
leasehold to accommodate 150 additional parking spaces and to retain the access onto San Bruno
Avenue for the UA employees.
Phase I of the project is now underway. The entire MMTC, including phase II improvements, is
expected to be complete within four to six years.
14
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
Item 2 - File 01-0052
Note: This item was continued by the Finance Committee at its meeting of
February 7, 2001.
Department:
Item:
Lessor:
Lessee:
Total Acreage and
Cost Per Month
Payable by United
Airlines, Inc. to the
Airport:
Purpose of Lease:
Amount Payable by
United to Airport:
Airport Commission
Resolution approving a new lease agreement for Plot 6
between United Airlines, Inc. (United) and the City and
County of San Francisco, acting by and through its
Airport Commission
City and County of San Francisco
United Airlines, Inc.
16.04 acres at a monthly rental rate of $132,054.65 for the
first and second years of the proposed lease
(approximately $8,232.83 per acre per month). For the
first and second years, annual rent would total
$1,584,655.76 ($98,794 per acre per year).
United will use the 16.04 acres for an air cargo facility,
administrative offices and employee parking.
$1,584,655.76 per year for the first and second year of the
lease. According to Ms. Dorothy Schimke of the Airport,
rent in the amount of $1,584,655.76 per year represents
the fair market value of the subject 16.04 acres on June 1,
1999, the retroactive effective date of the proposed lease.
Presently, United pays the Airport $508,353 under permit
for 19.35 acres (see Comment No. 2). The proposed lease
provides for annual increases in the rent based on
increases in the Consumer Price Index (CPI). According to
the proposed lease, the CPI adjustment would begin on
June 1, 2001. As stated in the Attachment provided by
the Airport, there will be no CPI adjustment between
June 1, 1999 and June 1, 2001, thereby resulting in no
CPI adjustment for the second year of the lease between
June 1, 2000 and June 1, 2001. The lease requires United
Airlines to pay CPI adjustments for the third, fourth and
fifth year of the lease. In the sixth year of the proposed
lease, the annual rental payment to the Airport will be
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
Term of Lease:
Right of Renewal:
Maintenance and
Operations:
Description:
determined by a City reappraisal of the land to
reestablish the fair market value amount. Subsequent
annual increases in the rent will be made based on
increases in the CPI through the end of the lease.
Retroactive to June 1, 1999 to June 30, 2011 (12 years
and one month)
Lessee has no renewal rights.
The Lessee, United Airlines, Inc., pays for the costs of all
maintenance and operations.
The proposed resolution would authorize a new 12 year
and one month lease retroactive to June 1, 1999 of 16.04
acres of a newly configured Plot 6 to accommodate
United's air cargo facility, some administrative offices and
employee parking. The 16.04 acres of a newly configured
Plot 6 would constitute approximately 83 percent of the
19.35 acres of Plots 5 and 6 covered under a month-to-
month permit, cancelable on 30-day notice, since the
expiration of original leases in 1993. According to Ms.
Schimke, United occupied the 16.04 acres from 1993 until
June 1, 1999 on a permit basis, instead of under a lease,
pursuant to the following conditions contained in a
Memorandum of Understanding negotiated in the early
1990s between the Airport and United Airlines:
1) Upon termination of the leases of Plots 5 and 6
in 1993, the leases would be replaced in the interim
by month-to-month permits, for the same areas at
the same land rental rates as were then in effect,
until the land was required for the Airport's Master
Plan construction or the functions were
accommodated elsewhere;
2) The Airport would offer United a "standard
lease" for that portion of the site primarily
comprising Plot 6, for continued accommodation of
its air cargo facility, offices and related parking;
3) Rent under the interim permit(s) would remain
at the same rate as was in effect upon termination
of the Plots 5 and 6 leases, and would be adjusted
BOARD OF SUPERVISORS
BUDGET ANALYST
16
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
to fair market value at the time the new leases
were in place.
The differences between the proposed lease for 16.04 acres
of a newly configured Plot 6 and the existing month-to-
month permit for 19.35 acres of Plots 5 and 6 are (1) the
permit is cancelable upon 30-days notice, (2) the new
lease adjusts the rents as described in Comment No. 2
below, (3) 1.43 acres have been added to result in a total
acreage of 16.04 acres for Plot 6, which originally totaled
14.61 acres, and (4) Plot 6 has been slightly reconfigured
due to the Airport's Master Plan construction program for
Boarding Area "G" and the Air Train (Airport Light Rail
System).
The proposed lease would reflect the City's
Administrative Code and other City requirements, such
as provisions requiring compliance with the ban on
tropical hardwoods and virgin redwood, the MacBride
Principles related to employment inequity in Northern
Ireland, the Non-Discrimination in City Contracts and
Equal Benefits Ordinance, and the Minimum
Compensation Ordinance.
Comments: 1. The Airport Commission adopted Resolution No. 00-
0464 on December 19, 2000, recommending the proposed
new lease to United retroactive to June 1, 1999. As shown
in the Attachment, the lease is retroactive to June 1, 1999
because in June of 1999, the Airport determined that the
Air Train required adjustments that would encroach upon
the eastern boundary of the new Plot 6. Finalization of
the Plot 6 lease was therefore put off until the Air Train
issues were settled and a legal description of the premises
could be accurately determined. Ms. Schimke reports that
because these adjustments were minimal, United agreed
to establishing an effective date of June 1, 1999 for the
proposed lease at the then market value rental rate. The
final configuration of the parcel incorporating the Air
Train land recapture was not defined and resolved
between the Airport and United until November of 2000.
2. According to Ms. Schimke, the proposed lease of 16.04
acres includes 14.61 acres of the old Plot 6 and 1.43 acres
of the old Plot 5. As previously noted, the annual rent for
the first and second year for the 16.04 acres would be
BOARD OF SUPERVISORS
BUDGET ANALYST
17
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
$1,584,655.76, a net annual increase of $1,076,302.76, or
an increase of approximately 211.7 percent, retroactive to
June 1, 1999, from the permit rent of $508,353 payable by
United to the Airport for the 19.35 acres of Plots 5 and 6
covered under permit. The new proposed lease pertaining
to 16.04 acres would result in a reduction of 3.31 acres
being leased by the Airport to United. Ms. Schimke
reports that upon approval of the proposed lease by the
Board of Supervisors, United would pay retroactively to
the City $1,793,838, representing the difference in the
monthly rental income of $89,691.90 for the 20 month
period from June 1, 1999, the start of the proposed lease,
through January 31, 2001. The net increase in rent
payable by United to the Airport for the first two years of
the lease is calculated as follows:
Approximate Annual
Cost per Acre
Total Acres
Annual Airport
Revenues
Old permit: Plot 5
$42,000
4.071
$170,940
Plot 6
$22,082
15.28
$337,413
Subtotal for permit
19.35
5508,353
Proposed new lease for
new Plot 6 (includes a
majority of the acreage
of the old Plot 6 and a
small parcel of the old
Plot 5)
$98,794
16.04
$1,584,655.76
Net Increase
51,076,302.76
3. The Budget Analyst notes that had the rent amount
for the second year of the proposed lease between June 1,
2000 and June 1, 2001 been adjusted for the increase in
the CPI, then the rent would have increased by 3.77
percent or approximately $59,742 to an annual rent of
approximately $1,644,398 instead of the proposed annual
rent of $1,584,655.76 for the second year of the proposed
lease.
4. Since the lease began on June 1, 1999, the proposed
resolution should be amended to provide for retroactive
authorization.
1 Under the proposed lease for the new Plot 6, United will lease 1.43 acres of the 4.07 acres of
Plot 5 that were under permit.
BOARD OF SUPERVISORS
BUDGET ANALYST
18
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
5. At the meeting of February 7, 2001 the Finance
Committee requested the Airport Director to attempt to
renegotiate this proposed new lease in order to require
United Airlines to pay a CPI adjustment to the Airport for
the second year of this proposed lease between June 1,
2000 and June 1, 2001. As of the writing of this report,
according to Mr. Peter Nardoza of the Airport, the Airport
has not yet been in contact with representatives of United
Airlines concerning a possible renegotiation of this lease
as requested by the Finance Committee. Therefore, Mr.
Nardoza is requesting that this item be continued for two
weeks.
Recommendations: 1. Amend the proposed resolution to provide for
retroactive authorization, in accordance with Comment
No. 4 above.
2. Approval of the proposed resolution, as amended, is a
policy matter for the Board of Supervisors because there
will be no CPI adjustment for rent for the second year of
the proposed lease between June 1, 2000 and June 1,
2001. Had the rent amount being charged by the Airport
to United Airlines for the second year of the proposed
lease been adjusted upward according to the increase in
the CPI, the rent payable by United to the Airport would
have increased by approximately $59,742 to an annual
rent of $1,644,398, instead of the proposed annual rent of
$1,584,655.76 as noted in Comment No. 3.
3. As requested by the Airport, continue this proposed
resolution for two weeks.
BOARD OF SUPERVISORS
BUDGET ANALYST
19
AIRPORT COMMISSION
SAN FRANCISCO INTERNATIONAL AIRPORT
CITY AND COUNTY OF SAN FRANCISCO
MEMORANDUM
TO:
FROM:
SUBJECT: Plot 6 Lease - United Airlines
Harvey Rose
Budget Analyst
BobRhoades |RL
Deputy Airport Director, Business
DATE: January 25, 2001
As discussed in the Budget Analyst's report, the subject lease comprises one element of a
complex series of land exchanges required to implement the Airport's Master Plan. The general
concept, negotiated in the early 1 990's, provided for existing permits to remain in place, at then-
current rents, until the land was required for the Master Plan construction or the functions were
accommodated elsewhere. It was generally agreed that the Plot 6 lease would not be finalized
until the parcel reached its final configuration. It was anticipated thai the plot would reach its
final configuration when the Airport recaptured a parking parcel in the area now comprising a
portion of the new Boarding Area G apron.
The parking parcel was surrendered by United in June 1999; however, at that time it became
apparent that the Air Train (Airport light rail system) guideway required adjustments that would
encroach upon the eastern boundary of Plot 6. The Plot 6 lease could not be absolutely finalized
until the guideway issues were settled and legal description of the premises could be written,
based upon formal survey. The issues were finally resolved in late 2000.
Because the guideway adjustments were minimal, the parties agreed that, once approved by the
Board of Supervisors, the Plot 6 rent commencement would be retroactive to June 1, 1999. The
first CPI adjustment will occur in accordance with lease provisions, once the lease is actually in
place (after Board approval). The Base Index for CPI adjustments is defined as "the most recent
Consumer Price Index published immediately prior to the Commencement Date," or April 1999.
The Comparison Index for the first (June 2001) adjustment will be April 2001 , generating a two-
year value increase.
20
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
Item 3 -File 01-0161
Department:
Item:
Lessor:
Lessee:
No. of Sq. Ft. and
Rent Per Year
Payable by The Body
Shop to the Airport:
Purpose of Lease:
Airport Commission
Resolution approving a new Boarding Area "F' Cosmetic
and Toiletries Lease between Buth-Na-Bodhaige, Inc.,
doing business as The Body Shop, and the City and
County of San Francisco, acting by and through its
Airport Commission.
City and County of San Francisco
Buth-Na-Bodhaige, Inc., doing business as (dba) The Body
Shop
1,123 sq. ft., located at Boarding Area "F' in the North
Terminal by Gate 82 at the Airport. The annual rent
payable by Buth-Na-Bodhaige, Inc., dba The Body Shop
(the proposed lessee) to the Airport would be the greater
of the Minimum Annual Guarantee of $275,001 for the
first year of the proposed lease or a percentage of gross
revenues realized by the proposed lessee. According to the
proposed lease, the annual percentage of gross revenues
payable by the proposed lessee to the Airport would be 12
percent of gross revenues up to and including $500,000,
plus 14 percent of gross revenues from $500,000.01 up to
and including $1,000,000, plus 16 percent of gross
revenues over $1,000,000. The proposed lease provides for
annual increases in the Minimum Annual Guarantee
based on increases in the Consumer Price Index.
The proposed lessee will use the 1,123 sq. ft. of space to
display and sell, on a non-exclusive basis, retail
merchandise generally found in a cosmetic and toiletries
store.
Term of Lease: January 7, 2001 through January 6, 2006 (five years)
Right of Renewal: Lessee has no renewal rights.
BOARD OF SUPERVISORS
BUDGET ANALYST
21
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
Utilities and
Janitorial Services:
The lessee pays for the costs of all utilities and janitorial
services.
Tenant
Improvements:
Description of
Proposed Lease:
Comments:
According to Ms. Cathy Widener of the Airport, the
proposed lessee would be required to pay for tenant
improvements to the 1,123 sq. ft. of leased space, at a
minimum cost to the lessee of $250 per sq. ft., or
$280,750.
The proposed resolution would authorize a new five year
lease of 1,123 sq. ft. at Boarding Area "F' next to Gate 82
to accommodate The Body Shop is a retail concession
which sells cosmetic and toiletries. According to Ms.
Widener, the proposed lessee occupied 1,423 sq. ft. at the
Airport from December 1, 1995 through January 6, 2001
under a prior lease. The 1,123 sq. ft. of space under the
proposed lease constitutes approximately 79 percent of
the 1,423 sq. ft. of space covered under the prior lease.
Ms. Widener reports that the reduction of 300 sq. ft. of
space is a result of reconfiguring a portion of the original
space to accommodate another concession under a
separate lease which will not be subject to future approval
by the Board of Supervisors, as noted in City Charter
Section 9.118, because the Airport space will be leased at
a rental amount totaling under $1,000,000 for the five
year term of the lease.
1. According to Ms. Widener, the proposed lease of 1,123
sq. ft. would result in a reduction of 300 sq. ft. of space
previously leased to the proposed lessee at the Airport.
The Minimum Annual Guarantee of the prior lease was
$152,412.94. The net increase in Minimum Annual
Guarantee payable by the proposed lessee to the Airport
is calculated as follows:
BOARD OF SUPERVISORS
BUDGET ANALYST
22
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
Approximate Monthly
Cost per Sq. Ft.
Total Sq. Ft.
Approximate Annual
Airport Revenues
Old lease
$8.93
1,423
$152,412.94 Minimum Annual
Guarantee or 15 percent of gross
revenues, whichever was greater
Proposed new
lease
$20.41
1,123
$275,001 Minimum Annual
Guarantee or 12 percent of gross
revenues up to and including
$500,000; plus 14 percent of
gross revenues from $500,000.01
up to and including $1,000,000;
plus 16 percent of gross
revenues over $1,000,000,
whichever is greater
Net Increase in Minimum Annual Guarantee
Payable to the Airport
$122,588.06/
2. Since the lease began on January 7, 2001, the
proposed resolution should be amended to provide for
retroactive authorization.
3. According to Ms. Widener, on October 5, 2000 the
Airport issued Invitations to Bid to 31 firms for the
subject space. The Airport received the following two bids
for this lease: (1) Buth-Na-Bodhaige, Inc., the existing
lessee, dba The Body Shop with a Minimum Annual
Guarantee of $275,001, and (2) Meritage Skin Care with a
Minimum Annual Guarantee of $249,660. On December
19, 2000, the Airport Commission approved the proposed
lease of space to the proposed lessee. The bid item, as
required of the Airport, was the Minimum Annual
Guarantee. The percentages of gross revenues as
identified on the first page of this report were required by
the Airport from all bidders.
4. The gross revenues achieved by the proposed lessee
would need to exceed $1,906,2561 for the Airport's
percentage revenues from the proposed lease to exceed the
Minimum Annual Guarantee of $275,001.
1 $1,906,256 was calculated in the following manner: first $500,000 gross revenues realized by the
proposed lessee at 12 percent ($60,000), plus second $500,000 gross revenues realized by the
proposed lessee at 14 percent ($70,000), plus gross revenues over $1,000,000, totaling $906,256,
realized by the proposed lessee at 16 percent ($145,001). $60,000 plus $70,000 plus $145,001 equals
the Minimum Annual Guarantee of $275,001.
BOARD OF SUPERVISORS
BUDGET ANALYST
23
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
5. Ms. Widener reports that actual rental revenues paid
to the Airport under the prior lease totaled $1,147,810 in
Calendar Year (CY) 1996, $1,174,742 in CY 1997,
$1,245,882 in CY 1998, and $1,216,148 in CY 1999.2
Based on the actual rent of $1,216,148 paid by the lessee
in CY 1999, the lessee earned gross revenues of
$8,107,6533 in 1999. Although the Airport has not
estimated the proposed lessee's gross revenues for the
year 2001, if the $8,107,653 in gross revenues realized by
the lessee in CY 1999 were sustained in the future
(recognizing that the new lease is 300 sq. ft. less than the
prior lease), the Airport would receive rental revenues of
$1,267,2244 annually under the new lease, an increase of
$51,076 or 4.2 percent over the prior lease which
contained 300 more sq. ft. However, the percentage
increase in rent of the proposed lease over the prior lease
will grow if the proposed lessee's gross revenues increase
in the future because the marginal rent paid by the
proposed lessee to the Airport will be based on 16 percent
of lessee's gross revenue over $1,000,000 instead of 15
percent under the prior lease.
6. As previously noted, irrespective of the gross revenues
realized by the lessee, the Airport will be paid an increase
in the Minimum Annual Guarantee for the proposed new
lease of $122,588.06 for a lease which contains 300 less
sq. ft. over the Minimum Annual Guarantee paid under
the prior lease.
Recommendations: 1. Amend the proposed resolution to provide for
retroactive authorization, in accordance with Comment
No. 2 above.
2. Approve the proposed resolution, as amended.
2 To date, figures for actual lease revenue from CY 2000 are not available.
3 $8,107,653 was calculated by dividing $1,216,148 in lease revenue in CY 1999 by 15
percent, which was the percentage of rent required under the prior lease.
4 $1,267,224, the potential future lease revenue, was calculated taking the sum of the
following: 12 percent of the first $500,000 gross revenues realized by the proposed lessee
($60,000), plus 14 percent of second $500,000 gross revenues realized by the proposed lessee
($70,000), plus 16 percent of $7,107,653 gross revenues realized by the lessee ($1,137,224).
$60,000 plus $70,000 plus $1,137,224 equals $1,267,224.
BOARD OF SUPERVISORS
BUDGET ANALYST
24
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
REVISED 2/16/01
Item 3 -File 01-0161
5. Ms. Widener reports that gross rental revenues
realized by The Body Shop under its prior lease totaled
$1,245,882 in 1998 and $1,216,148 in 19992. Ms. Widener
further reports that, based on 15 percent of gross
revenues under the prior lease, the lease revenues paid by
the lessee to the Airport for the 12 months ending
November 30, 1998 totaled $186,882, and for the 12
months ending November 30, 1999 totaled $182,623. The
15 percent of gross revenue under the prior lease exceeded
the Minimum Annual Guarantee of $152,412.94 by
$34,469 in 1998 and $30,210 in 1999. Ms. Widener
reports that the Airport has not estimated gross revenues
under the proposed new lease for 2001 and therefore has
not calculated revenues payable to the Airport based on
the percentage of gross revenues under the new lease. As
previously noted such percentages range from 12 percent
to 16 percent.
6. Irrespective of the gross revenues realized by the
lessee under the proposed new lease, the Airport will be
paid an increase in the Minimum Annual Guarantee for
the proposed new lease of $122,588.06 for a lease which
contains 300 less sq. ft. over the Minimum Annual
Guarantee paid under the prior lease. Further, the
Minimum Annual Guarantee of $275,001 under the
proposed new lease exceeds the rent paid to the Airport
for the 12 month ending November 30, 1999 by $92,378
($275,001 less $182,623).
Recommendations: 1. Amend the proposed resolution to provide for
retroactive authorization, in accordance with Comment
No. 2 above.
2. Approve the proposed resolution, as amended.
2 To date, figures for gross revenue from 2000 are not available.
BOARD OF SUPERVISORS
BUDGET ANALYST
24
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
Item 4 -File 01-0061
Department:
Item:
Description:
Department of Public Health (DPH)
Ordinance adding Section 10.117-126 to the San
Francisco Administrative Code, establishing a fund for
deposit of sums received under the Substance Abuse and
Crime Prevention Act of 2000 and designating the
Department of Public Health as the lead agency for
administration of the fund.
On November 7, 2000, California voters approved
Proposition 36, the Substance Abuse and Crime
Prevention Act of 2000. The Act requires that certain
non-violent drug possession offenders receive drug
treatment services in the community rather than
incarceration. The California Department of Alcohol and
Drug Programs has allocated funds for counties to receive
upon compliance with qualifying terms of the Act. To
qualify for funds, the Substance Abuse and Crime
Prevention Act of 2000 requires counties to (1) establish a
trust fund to deposit and account for the sums received
under the Act, and (2) designate a lead agency to
administer implementation of the Act.
The proposed ordinance would establish a trust account
for the purpose of receiving and accounting for State
funds from the Substance Abuse and Crime Prevention
Act of 2000, in accordance with Proposition 36, and would
designate DPH as the lead agency for implementation of
the Act.
Comments:
1. According to Ms. Monique Zmuda of DPH, the State
intends to allocate $58.8 million in start-up funds in FY
2000-2001 to various counties throughout California, and
$117.6 million annually to those same counties from FY
2001-2002 through FY 2005-2006 for continued
implementation of the Act. According to Ms. Zmuda, San
Francisco would receive $2,300,665 in FY 2000-2001
start-up funding and, beginning FY 2001-2002, an
estimated $4.6 million in funds annually through FY
2005-2006. Expenditure of such funds would be subject to
appropriation approval by the Board of Supervisors. The
Attachment to this report contains a list of the State's
BOARD OF SUPERVISORS
BUDGET ANALYST
25
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
proposed start-up allocations to each of the counties in
California that would receive funding for FY 2000-2001.
All such funds are to be used to provide non-violent
offenders who are in possession of drugs with drug
treatment services in the community instead of
incarceration.
2. According to Ms. Zmuda, the initial $2.3 million start-
up allocation from the State to the City and County of San
Francisco would need to be allocated to City departments
by the Board of Supervisors through supplemental
appropriations. Ms. Zmuda states, however, that
following the start-up period of the remainder of FY 2000-
2001, all of the subject State funds would become a part of
the regular departmental annual budgets, subject to
appropriations approval by the Board of Supervisors.
Additionally, funds not spent in any given year would be
carried forward to subsequent Fiscal Years, states Ms.
Zmuda. According to Ms. Zmuda, while it is clear at this
time that a large portion of these funds would need to be
allocated to the DPH budget, it has not yet been
determined how funds would be apportioned among
departments. However, as previously noted the Board of
Supervisors would have final appropriations approval of
such funds.
Ms. Zmuda notes that the California Department of
Alcohol and Drug Programs has recommended that
counties receiving Substance Abuse and Crime Prevention
Act of 2000 funds designate their respective departments
of public health as the lead agency. Ms. Zmuda states
that, because of this recommendation, and because public
health departments will ultimately be the agencies
providing substance abuse counseling as required by the
Act, the California Department of Drug and Alcohol
expects that most if not all counties receiving funds will
designate their respective departments of public health as
lead agencies, as is the case in San Francisco.
3. Ms. Zmuda states that all costs of implementation of
Substance Abuse and Crime Prevention Act of 2000,
including administrative and programmatic costs, would
be fully paid for by the funds allocated by the State to the
City and County of San Francisco. According to Ms.
BOARD OF SUPERVISORS
BUDGET ANALYST
26
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
Zmuda, the portion of the funds that would be spent to
cover administrative costs rather than programmatic
costs has not yet been determined. However, all such
administrative and programmatic costs would be subject
to appropriation approval by the Board of Supervisors.
Recommendation: Approve the proposed resolution.
BOARD OF SUPERVISORS
BUDGET ANALYST
27
FY 2000-01 Substance Abuse Treatment Trust Funds
Allocation of $58,781,147
Attachment
Numbor" of
Amount
Number"-*
Amount
.
January 1
Standard
F*lony
of Fund*
et
of Funds
Total
County
2000
Methodology
Drug Arrest,
Baaed
Treatment
Based
Allocation
Population'
Allocation™
Iflsdtmtanor
on Arrests
Caseload
on Caseload
Drug Amite
ALAMEDA
1,454,300
$1.140412
13,424
S8S2488
4.167
$759418
:.-:.■ 1
ALPINE
1,190
S74.350
43
$2,729
2
$365
177.4*4
HOOCH
34,400
$88,726
164
$10,410
40
$7,294
$116,429
BUTTE
204,000
S223410
995
S63.1S8
471
$85,883
$372^30
CALAVERAS
38.500
S101.73S
259
$16,440
152
$27,716
$145491
COLUSA
1B.7S0
$87,239
216
$13,711
135
$24,616
$125565
CONTRA COSTA
930,000 ♦.
$750,083
5.879
$373,170
2.308
$420,845
S1.550.0S7
DEL NORTE
26,000
$94,028
148
$9,394
138
$25,163
5128586
ELDORADO
152,900
$165,703
727
$46,146
320
$58,349
$290,199
FRESNO
605,000
$664,335
£.889
$373404
2,572
$458,043
S1.4M.1B2
GLENN
27,100
S S3 .366
159
S10.0S3
79
$14,405
$117465
HUMBOLDT
127,600
$167,133
762
$48,368
170
$30,998
$248,490
KiPERlAL
145,300
$160,125
1.917
$121462
312
$56,891
$358467
INYO
18,200
$86,635
110
$8,982
.65
S1S.40C
S10941C
KERN
658.900
$557,100
6,402
$406,367
1.267
$231,027
$1,194,483
KINGS
131.200
$160,776
652
$41488
161
$29,357
$24051*
LAKE
55,700
$114,360
4U
$26,279
199
$36486
$178424
LASSEN
33,950
$98,396
75
$4,761
147
$26,804
$129460
LOS ANGELES
9,804,300
$7,328,414
58.636
$1,734,615
25.666
$4,679,983
$15,743 J) 11
MADERA
117,100
$159,426
400
$25,390
233
$42,486
$227,302
MAWN
249,700
$256,753
680
$43,163
504
$91,900
$30151*
UARIPOSA
16.150
$85,331
87
$5,522
60
$10,941
$101,793
MENDOCINO
87.600
$137,774
761
$48404
258
$47,044
$233,122
MERCED
210,100
$227,687
1.420
$90,134
276
$50,326
$368,148
MODOC
9.000
$80,670
57
$3,618
41
$7,476
$91,764
MONO
10.900
$81,477
37
$2449
187
$34,098
JI17.S34
MONTEREY
399,300
$366457
2.126
$134,948
567
$103,388
$804,19]
NAPA
127.000
$166,693
492
$31,230
312
$58,891
J254J13
NEVADA
91.100
$140,343
274
$17492
190
$34,645
$192480
ORANGE
2.828.400
$2,149,482
16.515
$1.048490
4,353
$793,734
$3491405
PLACCR
234.4O0
$245,523
1.1 SS
$73,314
654
$119452
$438,088
PLUMAS
20.350
$88,413
71
$4407
215
$39404
$132,123
RIVERSIDE
1,522.900
$1,191,264
9,029
$573,116
1.9SO
$355567
$3.119448
SACRAMENTO
1,209,500
$961,232
S.0O2
$571,402
3.169
5577.64 1
$2.1 10.475
SAN BENITO
49,800
$110,029
140
$8486
42
$7,658
$12*474
SAN BERNARDINO
1.689,300
$1,313,399
14.680
$931,813
2.943
$536,632
$2.7)1443
SAN DIEGO
2,911,500
$2,210,476
21,448
$1,361,412
5.325
$970,97C
$44*2457
SAN FRANCISCO
801,400
$661,630
10,679
$677448
5471
$961,124
$2400465
SAN JOAQUIN
566,600
$489,353
3.409
$216,38€
1.465
$267,131
$972470
SAN LUIS OBISPO
245,200
$253.45C
1.140
$72,361
410
$74.76£
$400471
SAN MATEO
730.000
$60948€
3,216
$204.13«
1,565
$285.36J
$1498.786
SANTA BARBARA
414,200
$377,494
2,672
$169,60;
2.250
$410.26!
$957488
SANTA CLARA
1,736.700
$1.348.t9C
10.573
S671.12
2.610
$475.91;
$2.495223
SANTA CRUZ
255.000
$260,54:
2,138
S135.7K
) 595
S108.49
1 $504446
SHASTA
167,000
$196,05:
1.461
$32,73
' 271
$46,41
I tVULTni
SIERRA
3.140
$75.78
23
$1,461
) 46
$8.36!
$85529
SISKIYOU
44.200
$105.91
9 255
$16,181
5 397
$72.39
$194,494
SOLANO
399.000
$366.33
r 2.360
$149,80
1 594
$108.31
1 $824,449
SONOMA
450.100
$403.84-
1 2.772
$172,14-
» 1.533
$279.53
3 $8S5519
STANISLAUS
441.400
$397,45!
9 3.528
$22344
3 625
$113.96
1 $735481
SUTTER/YUBA
138.600
$175.20
T 1J02S
$65.06
2 435
$79.31
:-| $319588
TEHAMA
56,200
$114.72
T 292
$1843
5 193
$35.19
2 S164..4U
TRINITY
13,050
$83.05
5 113
$7.17
3 74
$13.49
: $103,721
TULARE
368,000
$343,58
3 3,745
$23746
8 683
$12444
0 $706,090
TUOLUMNE
53.000
$11247
B 152
$9.64
8 160
$29.17
$151300
VENTURA
756.500
$628.73
7 5.315
$337,37
0 1.245
$227.01
6 $1,193,122
YOLO
162.900
$193.04
3 1,256
$79.72
5 560
$102.11
2 $374579
[STATEWIDE TOTA
L 34.336.380
I S29.390.57
\ 231,513
$14,695.28
7 80.5S2
$14,695.23
S58.781.147
I
" B*«* «* rtrmnom PoeuUUon ExlmalM for January 1 , 3000.
" Standard methodology S2400 p«r $ 1 million Increase. Ine remainder distributed per capita.
"~ D«pL of Justice. Adult Drug Arrests. 1999.
**** DepL of Alcohol and Drug Programs, California Alcohol and Drug Data System, based on the number of persons in treatment on November 1.1999,
28
Memo to Finance Committee
February 21, 2000 Finance and Labor Committee Meeting
Item 5 - File 01-0272
Item:
Amount:
Source of funds:
Description:
Comment:
Recommendation:
Supplemental appropriation ordinance in the amount of
$100,000 for disaster relief in El Salvador.
$100,000
General Fund Reserve
On January 13, 2001 an earthquake measuring 7.6 on the
Richter scale occurred in El Salvador reportedly killing
over 800 persons and leaving thousands homeless. On
February 13, 2001 a second earthquake measuring 6.6 on
the Richter scale struck El Salvador. As of the writing of
this report, news reports state that 274 persons have been
found dead, over 2,000 have been injured and over 15,000
homes have been destroyed.
The proposed supplemental appropriation would commit
$100,000 for disaster relief in El Salvador.
According to the Office of the Sponsor of the proposed
ordinance, an appropriate entity for receipt of the disaster
relief contribution has not yet been identified. It is the
expectation of the Office of the Sponsor that such a
recipient will be identified by the Board of Supervisors
meeting of Tuesday, February 20, prior to the Finance
Committee meeting of February 21.
According to Mr. Steve Kawa of the Mayor's Office, the
disaster relief contribution would be disbursed through
the Mayor's Office of Economic Development (MOED). Mr.
Kawa adds that MOED would be responsible for assuring
that the funds are contributed to an appropriate disaster
relief organization and used for the intended purpose of
providing relief for the El Salvador earthquake victims.
In October of 1999, the Board of Supervisors approved an
appropriation of $250,000 for earthquake relief efforts in
the City of Taipai. Also, in 1995, $50,000 was
appropriated by the Board of Supervisors for earthquake
relief in the City of Osaka following the Kobe earthquake.
Approval of the proposed ordinance is a policy matter for
the Board of Supervisors.
BOARD OF SUPERVISORS
BUDGET ANALYST
29
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
Item 6 - File 01-0108
Note: This item was severed from File No. 00-2087 and continued by the Finance
and Labor Committee at its meeting of January 17, 2001, with a request by
the Committee that the Assessor-Recorder attempt to reduce the contract
with KPMG and instead complete the some of the contract work in-house.
Department:
Item:
Amount:
Source of Funds:
Description:
Assessor-Recorder's Office
Ordinance appropriating $726,726 from the General Fund
Reserve to fund a contract with KPMG to design and
implement a reengineering plan for the Assessor-Recorder's
Office for Fiscal Year 2000-01
$726,726
General Fund Reserve
The proposed supplemental appropriation for $726,726
was for the purpose of expanding an existing $400,000
contract with KPMG to develop and implement a
reengineering plan, and assist in reducing the
Department's backlog in the processing of deeds for a total
contract cost of $1,126,726, for the Assessor-Recorder's
Office for Fiscal Year 2000-01. This reengineering plan
analyzes the department's work processes in order to
identify changes the department must make to run more
effectively. Ms. Onyemem advises that the Assessor-
Recorder's Office originally contracted with KPMG, in
consultation with the Mayor's and Controller's Offices, in
June of 2000 to improve efficiencies in the department.
KPMG agreed to identify and re-engineer process
inefficiencies, conduct a training needs assessment,
provide necessary training, improve customer service and
help the department transition into a new computer
system. The Assessor-Recorder's Office included $400,000
in its FY 2000-01 budget for this KPMG contract. Ms.
Onyemem advises that the Assessor-Recorder's Office
negotiated with the Controller's Office to include this
$400,000 contract within a larger City contract with
KPMG (discussed further in Comment No. 3 below).
According to Ms. Onyemem, in September of 2000, and
again in October of 2000, the Assessor-Recorder's Office
BOARD OF SUPERVISORS
BUDGET ANALYST
30
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
requested that KPMG revise and expand the scope of its
work plan in the three ways listed below. The Budget
Analyst notes that the Assessor-Recorder's Office did have
authority to request from KPMG proposals for expanding
the scope of the existing $400,000 contract. However, the
Assessor-Recorder's Office did not have the authority to
finalize the expanded contract discussed below without
first obtaining approval from the Board of Supervisors of
this subject additional appropriation of $726,726.
As reported to the Finance and Labor Committee on
January 17, 2001, this request of $726,726 was for the
following three KPMG projects:
(1) After KPMG and the Assessor-Recorder's Office agreed
to the terms of the original $400,000 contract, in
September of 2000 the Assessor-Recorder's Office
directed KPMG to help manage and facilitate the
reduction of the department's backlog in processing
deeds, a priority for the Assessor-Recorder's Office. The
proposed expanded work plan would expand the
original contract by $207,926 to reduce the Assessor-
Recorder's backlog in processing deeds.
(2) KPMG also agreed to expand the scope of its contract
with the Assessor-Recorder's Office at a cost of
$172,664 for the expanded scope management plan.
This expanded scope focuses on developing a new
management strategy and reorganizing the
department.
(3) Finally, KPMG was to implement a reengineering plan
for the Assessor-Recorder at a cost of $346,136.
These three component costs of (a) $207,926, (b) $172,664
and (c) $346,136 totaled $726,726, the subject of this
request and together with KPMG's existing contract of
$400,000 to assist the Assessor, the total contract with
KPMG would have been $1,126,726.
BOARD OF SUPERVISORS
BUDGET ANALYST
31
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
A summary budget for the total originally proposed
contract costs of $1,126,726 with KPMG were as follows:
SUMMAKY
Reengineering Plan
Original Budget
Expanded Scope/Deed Backlog
$400,000
207,926*
Revised Subtotal
$607,926
Expanded Scope/Management Plan
Implementation of Reengineering Plan
172,664*
346,136*
Total Contract Costs
$1,126,726
*Total of $726,726, which is the subject of this request.
As shown in the table on the following page, the hourly
rage being charged by KPMG ranges from $121.28 to
$281.14.
BOARD OF SUPERVISORS
BUDGET ANALYST
32
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
Budget for
Reengineering Plan:
The budget for the originally proposed $1,126,726 contract
with KPMG, including the subject $726,726 supplemental
appropriation, is as follows:
Contract with KPMG
Hourly
Rate
Number
of Hours
Total
Reengineering Plan
Professional Fees
Managing Director
Project Manager
Senior Consultants
Consultants
Analysts
Sub-contractor
Subtotal Professional Fees
Deed Backlog Completion
Professional Fees
Managing Director
Project Manager
Senior Consultants
Analysts
Subtotal Professional Fees
Total Professional Fees
KPMG's Otber Expenses*
$281.14
$165.38
$148.84
$148.84
$148.84
$121.28
$281.14
$165.38
$148.84
$148.84
32
418
408
492
504
36
8,997
69,129
60,727
73,229
75,016
4,366
1,890
8
422
904
144
$291,464
2,249
69,790
134,551
21,433
1,478
3,368
$228,023
519,487
88,439
**Subtotal Reengineering/Backlog
3,368
$607,926
Expanded Scope/Management Plan
Professional Fees
Managing Director
Project Manager
Senior Consultants
Subtotal Professional Fees
KPMG's Other Expenses
$281.14
$165.38
$148.84
240
320
200
$67,474
52,922
29,768
760
$150,164
22,500
**Subtotal Management Plan
760
$172,664
Estimates for
Implementation of Reengineering Plan
Professional Fees
Managing Director
Project Manager
Senior Consultants
Analysts
Subtotal Professional Fees
KPMG's Other Expenses
$281.14
$165.38
$148.84
$148.84
200
400
400
800
$56,228
66,152
59,536
119,072
1,800
$300,988
45,148
Subtotal Implementation Estimates
1,800
$346,136
Total KPMG Contract
5,928
$1,126,726
Less $400,000 included in FY 2000-01 Budget
(400,000)
Total Supplemental Appropriation
$726,726
* Other Expenses include mileage, parking, meals and housing.
** Already expended or incurred (See Comment No. 1 below).
BOARD OF SUPERVISORS
BUDGET ANALYST
33
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
Comments on
Reengineering Plan: 1. Of this total subject request of $726,726, according to
Ms. Onyemem, KPMG has completed its work and
incurred expenses for the first two components of this
subject request, namely $207,926 for reducing the
Assessor's backlog in processing deeds, and $172,664 for
the expanded scope management plan. Therefore of this
total subject request of $726,726 KPMG has already
incurred expenditures of $380,590.
2. The Budget Analyst notes that the Assessor's Office
has incurred these additional costs of $380,590 without
first obtaining prior appropriation approval by the Board
of Supervisors. The Assessor-Recorder's Office did not
have the authority to finalize an expanded contract with
KPMG for such additional expenditures without first
obtaining prior appropriation approval by the Board of
Supervisors. Therefore, the Budget Analyst recommends
that the proposed ordinance be amended to provide for
retroactive authorization.
3. According to Ms. Onyemem, the Assessors Office
negotiated with the Controller's Office to include the
original $400,000 contract with KPMG within a larger
City contract with KPMG in order to begin a
reengineering of the department's business practices as
soon as possible. According to Mr. Hymel of the
Controller's Office, additional services being performed
by KPMG are being done under the Controller's City-
wide audit contract with KPMG. Mr. Hymel advises that
this contract, which was competitively bid and approved
by the Civil Service Commission in May of 1999, allows
the City to contract with KPMG for as needed auditing
and accounting services. The contract with KPMG is a
three-year contract with two one-year renewal options.
Mr. Hymel advises that the original KPMG contractual
services for the Assessor-Recorder is limited to $400,000,
which was included in the FY 2000-2001 Assessor-
Recorder budget and did not include this subject
supplemental appropriation request of $726,726 of which
KPMG has already incurred expenditures totaling
$380,590.
BOARD OF SUPERVISORS
BUDGET ANALYST
34
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
4. At its January 17, 2001 meeting, the Finance and
Labor Committee requested that the Assessor-Recorder
attempt to reduce the contractual services costs with
KPMG and instead complete some of the contract work
in-house.
5. In order to reduce costs, related to the third component
of KPMG's work, namely the Implementation of the
Reengineering Plan, which KPMG was originally to have
been paid $346,136, the Assessor now proposes KPMG to
be paid $153,544 or $192,592 less as follows:
(a) Development of Duties and
Responsibilities Documents and Desk
Procedures $100,285
(b) Implementation of Reclassifications for
Appraisers and Clerks 39,300
(c) Related expenses 13.959
Total $153,544
The details of this reduced amount of $153,544 is shown
in the Attachment provided by the Assessor-Recorder.
6. Therefore the proposed supplemental appropriation
ordinance for contractual service costs with KPMG
should be reduced by $192,592 from $726,726 to
$534,134.
7. According to the Assessor-Recorder, the balance of the
work needed to complete the Implementation of the
Reengineering Plan of $192,592 would be handled by the
Assessor's staff on an in-house basis. The Budget Analyst
questioned whether the Assessor-Recorder Office has
sufficient staffing at this time to dedicate employees to
assist in implementing this reengineering plan without
forgoing existing needs in the department. The Assessor-
Recorder responded that her staff will just work harder
to complete such additional work as well as to fulfill their
existing responsibilities.
BOARD OF SUPERVISORS
BUDGET ANALYST
35
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
Recommendations: 1. In accordance with Comment Nos. 5 and 6 above,
reduce this proposed supplemental appropriation
ordinance for contractual services with KPMG by
$192,592 from $726,726 to $534,134.
2. Amend the proposed ordinance to provide for
retroactive authorization for costs previously incurred,
without first obtaining prior appropriation approval from
the Board of Supervisors in accordance with Comment
No. 2 above.
3. Approval of the proposed ordinance, as amended, is a
policy matter for the Board of Supervisors because the
Assessor-Recorder's Office did not have the authority to
incur additional costs of $380,590 without first obtaining
prior appropriation approval from the Board of
Supervisors.
BOARD OF SUPERVISORS
BUDGET ANALYST
36
Attachment
Contract with KPMG
Hourly
Number
Total
Rate
of Hours
Revised Estimates for
Implementation of Reengineering Plan Components
Professional Fees
Managing Director
$281.14
22
$6,186
Project Manager
S165.38
344
56,892
Senior Consultants
S 148.84
314
46,738
Analysts
Subtotal Professional Fees
$148.84
200
29,769
880
$139,585
KPMG Other Expenses at 10% of Professional Fees
Total-Implementation Estimates
13,959
880
S 153,544
Source: Assessor-Recorder's Office
37
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
Item 7 - File 01-0208
Department:
Item:
Amount:
Public Utilities Commission (PUC)
Hetch Hetchy Water and Power (Hetch Hetchy)
Ordinance appropriating $25,400,000 of Hetch Hetchy
Operating Fund monies to fund the purchase of electrical
power to meet municipal and contractual obligations for
fiscal year 2000-2001.
$25,400,000
Description:
Recommendation:
Due to problems with Hetch Hetchy's computer system,
the department was unable to provide the Budget Analyst
with requested information. Therefore, Ms. Laurie Park,
Acting General Manager of Hetch Hetchy, has requested
that the Finance Committee continue the proposed
supplemental appropriation for one week.
Continue this item for one week as requested by Hetch
Hetchy.
BOARD OF SUPERVISORS
BUDGET ANALYST
38
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
Item 8 - File 00-2067
Note: This item was re-referred to the Audit and Government Efficiency
Committee by the Board of Supervisors at its meeting of January 16, 2001
and was subsequently transferred to the Finance Committee because of
concerns expressed about the Public Library utilizing a collection agency for
delinquent accounts.
Department:
Item:
Public Library
Ordinance amending the San Francisco Administrative
Code by adding Section 8.21-2 to authorize the Library
Commission to revise certain fines and fees for the use of
library materials and services and ratifying prior fines
and fees.
Description:
The proposed ordinance amends Chapter 8 of the San
Francisco Administrative Code by adding Section 8.21-2,
to:
• Add a fee schedule for overdue fines, library card
replacement, processing fees, replacement of lost
materials, lost/damaged fees, service fees, document
delivery and special services.
• Ratify prior fees and fines.
Attachment I, provided by the Public Library, provides an
overview of the Library's existing and proposed fines and
fees, as contained in the proposed ordinance.
Attachment II, provided by the Public Library, identifies
the amount of change for each fine and fee and provides
an explanation of the differences between the Public
Library's existing fines and fees and the proposed fines
and fees. According to Mr. George Nichols of the Public
Library, the largest decrease in revenue would result from
the elimination of both the $0.50 Interlibrary Loan Fee1
1 The $0.50 Interlibrary Loan Fee is currently charged to Public Library patrons when they request a
book or other items that are not available in the San Francisco Public Library system. The
Interlibrary Loan Fee covers the cost of notifying the patron that the material requested from
libraries in other jurisdictions has been received by the Public Library and is available for loan.
BOARD OF SUPERVISORS
BUDGET ANALYST
39
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
and the $0.50 Reserve Fee2, which are proposed to be
deleted in order to enhance the public's use of the
Library's collection. According to Mr. Nichols, eliminating
the Interlibrary Loan Fee and Reserve Fee will result in a
revenue loss of approximately $16,000 annually.
One of the proposed new fees is a $10 fee for the Recovery
of Delinquent Accounts. The Public Library has recently
contracted with the Unique Management Collection
Agency, selected through a Request for Proposals process,
to pursue delinquent accounts that are 90 days late, with
a total value of at least $50.00 per account. According to
Mr. Nichols, this new $10 Recovery of Delinquent
Accounts Fee would cover the cost of the collection service
as well as the Public Library's cost of processing returned
materials. Of the $10 Recovery of Delinquent Accounts
Fee, $8.95 would be paid to the collection agency and
$1.05 would be kept by the Public Library. Mr. Nichols
states that although the Public Library's purpose in
implementing this collection program is to recover
overdue books and materials, additional revenue will
result from the Recovery of Delinquent Accounts Fee as
well as from fines and fees paid when overdue materials
are returned. Furthermore, Mr. Nichols states that costs
would be avoided as returned materials would not have to
be replaced.
Comments: 1. As shown in Attachment III, provided by the Public
Library, the estimated annual revenues to be realized
from the Public Library's revised fine and fee schedule
would be $537,626 which is approximately an increase of
11.9 percent or $57,041 more than the actual fines and
fees of $480,585 collected by the Public Library in FY
1999-2000.
2. Mr. Nichols states that the amount of fines and fees to
be collected on an annual basis should fully recover the
Public Library's costs including the costs paid to the
collection agency as well as the Public Library's costs to
2 The $0.50 Reserve Fee is currently charged to Public Library patrons when they request a book or
other item that is stocked by the Public Library but is not available because it has been checked out.
The Reserve Fee covers the cost of notifying the patron that the material requested has been
returned, placed on reserve, and is available to be checked out.
BOARD OF SUPERVISORS
BUDGET ANALYST
40
Memo to Finance Committee
February 21, 2001 Finance Committee Meeting
replace lost, stolen, or damaged materials and other
related processing costs.
3. Attachment IV, provided by the Public Library,
provides information as to how the proposed fines and
fees were determined. According to Mr. Nichols, the
proposed fines and fees schedule was approved on
September 5, 2000 by the Library Commission. Mr.
Nichols reports that the Public Library's fines and fees
were last revised in 1994.
Recommendation:
4. According to Ms. Susan Hildreth of the Public Library,
the only fine or fee not currently in effect is the $10
Recovery of Delinquent Accounts Fee.
5. According to Mr. Buck Delventhal of the City
Attorney's Office, prior to the City's 1996 Charter, the
Library Commission had the authority to set the Public
Library's fines and fees. In accordance with the 1996
Charter Section 2.109, the Board of Supervisors must
approve by ordinance any rate, fee, or similar charge to be
imposed by any City department. Currently there is no
section in the City's Administrative Code for Library fines
and fees. Mr. Delventhal states that the proposed
ordinance would establish the fines and fees of the Public
Library as well as ratify (a) the existing fines and fees and
(b) the proposed revised fines and fees.
Approval of the proposed ordinance is a policy matter for
the Board of Supervisors.
Supervisor Leno
Supervisor Peskin
Supervisor Gonzalez
Clerk of the Board
Controller
Steve Kawa
BOARD OF SUPERVISORS
BUDGET ANALYST
41
ll'ffJOO
LIBRARY FINES FEES
Attachment I
Pase 1 of T~
?.--• CURKfcNI.
"PROPOSED I
ADULT TEENS
JUVENILES
ADULT TEENS
JUVENILES
FINES
Per Day 1 Max | Per Day | Max
Per Day | Max | | Per Day | Max | Per Day j Max
Per Day I Max
Books
$ 0.10 I $ 5.00 I J - I $ -
$ - I $ - | | $ 0.10 I $ 5.00 | $ - I $ -
I . If .
Phonorecords
$ 0.10 1$ 5.00 1$ - 1$ -
S - IS - I |S 0.10 I $ 5.00 | $ - IS -
$ - l$ -
Audio Cassettes
$ 0.10 i $ 5.00!$ - !$ -
$ - IS - i IS 0-10
$5,001$ - IS -
$ • IS -
Books on Tape
$ 0.10 . $ 5.00 i $ - I $ -
S - IS • i IS 0.10
$ 5.00 1 $ - | $ .
S - IS ■
Compact Discs
I I i
$ 0.50 i $ 10.00 : $ - ! $ -
s - Is - I Is 0.10 Is 5.00 Is • Is •
s -
Magazines
$ 0.10 1 Cost » - i $ -
S - IS - I IS 0.10IS 5.00 1$ • |$ .
$ -
Paperback (Cataloqued)
$ 0.10 I $ 5.00 i $ - $ -
S - IS - IS 0.10 1$ 5.00 1$ - |$ -
$ •
Paperback (Uncataloqued)
I I i
$ 0.10 I $ 0.50 I $ - ! S •
$ -
I
$ i
S 0.10 !$ 2.00
, . ,.
$ -
Art Prints
$ 1.00 I $ 10.00 ! $ - $ -
$ -
$ -
s •
s - Is •
$ -
Video & DVD
$ 1.00
i I
$ 10.00 I $ 1.00 i $ 10.00
$ 1.00
$ 10.00 i
$ 1.00
S 5.00
s -
s -
Supplemental Materials/Booklets
$ 0.25!$ 3.00'
$ -
$ -
IS -
$
s -
s -
Sheet Music
Varies
Varies |$ • !$ •
s -
J
$ 0.10
$ 5.00
s -
s -
Orchestral Material/Music Sets
$ 0.25 I $ 10.00 ! $ - IS -
s •
r$ •
s ::-.
$ 10.00
s -
$ - !$ •
Vertical File Materials
$ 0.10 I $ 5.00 i $ - I $ -
$ • l$ - | |$ 0.10;$ 5.001$ ■
$ ■ IS • i
FEES
Per Day
Max
Per Day
Max
Per Day
Max
Per Day
Max
Ptr Day
Max
Per Day
Max
Library Card Replacement
S 2.00
$ 0.50
•
$ 0.50
.-
$ 1.00
_ > -
$ 0.50
--■■:-
$ 0.50
Visitors Card (Non-California Resident)
$20.00
$ 20.00
$ 20.00
$ 1000
'■ ■'. .-.
, . „
$ 10.00
Processing fee (lost catalogued material)
. '...
$ 5.00
t
$ 5.00 I -
$ 5.00 1
.---
$ 5.00 s ■:
$ 5.00
Processing fee (lost uncatalogued material)
$ 100
■ -
$ 200 I - -
$ 2.00 1
- .■-■■■
$ -
t t rvt
$ •
Books by Mail
?&\
$ -
" »
S -
$ • 1
$ 3.00
$ 3.00
Interlibrary Loan (ILL)
$ 0.50
$ 0.50
■ - •
$ 0.50 1
$ •
$ •
$ •
Reserve Fee
' -.' ■•'■
$ 0.50
$ 0.50
1 r . .
$ 0.50
■"-.-.
$ -
$ ■
-;_."■
s •
Returned Check Fee
perChk.
$ 10.00
S 10.00 |
N/A 1 I perChk.
$ 10.00
■ '
$ 10.00
i-jTVC
N/A
Recovery of Delinquent Accounts
.
$ -
\
i i perAcct
$ 10.00
:
1
1
Interlibrary Loan (ILL) Photocopy Fee
per page
$ 0.15
per page: $ 0.15
per page
$ 0.15 : | per page! $ 0.25
pa pane
$ 0.25
per page
$ 0.25 ;
SF History Center Photocopy Fee
per photc
$ 1.00
per photo $ 1.00 i per photc
$ 1.00i ! per photo $ 1.00
per photc
$ VOOlparpnotdS 1.00 1
SF History Center Reproduction Fee
$ 15.00 | 2
$ 15.00 |
$ 15.00 |H
$ 15.00 |
s -;::
Barcode Label
J -
$ 0.25
- i$ 0.25 I "
$ 0.25 I
$ 0.25
■
$ 02SH9
$ 0.25!
Damaged Barcode & Flyleaf
$
IS - I
$ - |
. :
$ 1.00
$ 1.00
::±3.~-
$ 1.00 I
Crayoning a single page
$ 0.25
$ 0.25 I r
$ 0.25!
-
$ •
$ •
$ -
Damaged Date Due Slip
$ 0.10
$ 0.10
'
$ 0.10 I
$ -
$ -
$ -
Damaged Mylar Book Cover
IS 0.25
$ 0.25
$ 02!
.
$ -
$ - I
$ •
Damaged Plastic PD Sleeve
|$ 1.00
!;
$ 1.00
! /
s 1.00
1
$ -
I. •
I
$ -
Source: SF Public Library
42
LIBRARY FINES FEES
Attachment I
Page 2 of T~
ADULT TEENS JUVENILES
ADULT
TB
ENS
JUVEI*
1ILES
REPLACEMENT COSTS
Perltem| Max | Per ltem| Max (Per ltem| Max |
Per Item] Max | Per Item] Max (Per Itemj Max |
Hardback Non-fiction
$ 25.00 ; S 30.00 1 S 25.00 i $ 30.00 1 $ 12.00 I $ 17.00 I
I $ 35.00 I $ 40.00 | $ 35.00 I $ 40.00 | $ 20.00
S 25.00 |
Hardback Fiction
$ 18.00 ! S 23.00 I S 18.00 I $ 23.00 I S 12.00 ! S 18.00 i
I $ 25.00 I $ 30.00 I $ 25.00 | $ 30.00 | $ 15.00
$ 20.00
Paperback Catalogued Non-fiction
S - I S 15.00 I $ - IS 15.00 IS - I $ 10.00 I
I $ 20.00 I $ 25.00 | $ 20.00 I $ 25.00 | $ 10.00 | $ 15.00
Paperback Catalogued Fiction
$ - i $ 5.00 ; $ - IS 5.00 IS - IS 5.00 !
i $ 10.00 | $ 15.00
S 10.00 ! $ 15.00 I $ 5.00 | $ 10.00
Paperback Uncatalogued
$ 5.00 : S - I $ 5.00 $ - I S 5.00 1 $ - !
I $ 5.00 I $ -
$ 5.00 | $ - | $ 5.00 I $ -
PB/HB International Generic Record
$ 5.00 I $ 10.00 I S 5.00 I S 10.00 IS 5.00 I S 10.00 i
I $ 5.00 | S 15.00 I $ 5.00 | $ 15.00 I $ 5.00 I $ 15.00
Periodicals/Magazines
S 3.00 i S - i$ 3.00 ! $ - IS 3.00 i $ -
! S 5.00 ! $ - IS 5.00 i$ - | $ 5.00 I $ -
Phonorecords
S 9.00 i $ - IS 9.00 i $ - IS 9.00 1 S •
i $ 15.00 | S 20.00 I S 15.00 j $ 20.00 | $ 15.00 | $ 20.00
Audio Cassettes
$11,00 1$ - !$ 11.00 1$ - 1$ 11.00 1$ -
I $ 10.00 i $ - | $ 10.00 |$- |$ 10.00 | $ -
Videos
VARIES 1 VARIES 1 VARIES ' VARIES 1 VARIES 1 VARIES
I $ 20.00 I $ 25.00 | $ 20.00 | $ 25.00 j S 20.00 | S 25.00
Digital Video Disc (DVD)
S - I $ - i $ - i $ - i $ - 1 $ -
| $ 20.00 | $ 25.00
$ 20.00 I $ 25.00 I $ 20.00
$ 25.00 j
Audio Books
$ 5.00 1 per tape i $ 5.00 1 per tape 1 $ 5.00 | per tape
| $ 5.00 I pertape
S 5.00 I per tape | $ 5.00
pertape
Sheet Music Scores
1 SET BY ART DEPARTMENT 1
| SET BY ART DEPARTMENT |
Sheet Music (Uncatalogued)
i SET BY ART DEPARTMENT 1
| SET BY ART DEPARTMENT I
Sup. Materials (I.e., booklets, maps, etc.)
$ 3.00 M . |$ 3.00 | -i--:---|$ 3.00|--~-:
! $ 3.00 bW-sj
S 3.00 PaijpS;
$ 3.00 |iS^>:r:
Compact Discs
VARIES 1 i VARIES 1 1 VARIES 1
| $ 15.00 | $ 20.00
$ 15.00 | S 20.00
$ 15.00 | $ 20.00
Language Sets
$ 10.00 I" -'"- | $ 10.00 I '
$ 10.00 l-^i--
j S 10.00 \y^T&-:
$ 10.00
■i "SS?S
$ 10.00 1 1 -. ---
Vertical File/Picture File
$ 2.00 I--. |S 2.00 | ,
$ 2.00 K
|$ 5.00 !=• s-^i
$ 5.00
■- --'-.=
$ 5.00 ; \ '
Lost Audio Cassette Case
$ 1.00 I ,.
L$ 1.00
$ 1.00 | -: -
IS 1.00 r^sa^
$ 1.00
ri£§=*3
$ 1.00
SSJeS ~
Lost Videocassette Case
S 3.00 I - -
$ 3.00
$ 3.00 I '--
i $ 2.00 ys^gjg
$ 2.00
~i - ~
$ 2.00
■i7:^-
Lost CD Jewel Case
$ - I ■■-■■ -IS - I ",-:
$ - m -
i$ loo r. .--^.-.■<--
$ 1.00
:lv^_v
S 1.00 t- v^-
Source: SF Public Library
43
\3Hfion
LIBRARY FINES FEES
Attachment 11
Paere 1 ot 2
':.^y-:-,;. ;;.,,, *.>,-.-•. ^■^"'■'■H
FINES ; I Per Day) Max | Per Day] Max | Per Day| Max |
1 Books 1$ - . i$ ■ S - !
S • IS - 1
s - 1
Phonorecords IS - ' S • ' S - '
1 • IS - 1
s •
Audio Cassettes 1 | S - ! S - $ - 1
S • IS - 1
s - !
Books on Tape 1 $ - ! S • i - 1
s ■ is - 1
Compact Discs 1 $ (0.40) i S (5.00)' $ - 1
, - Is - 1
Daly and maaimum bias reduced so tnat tney wl be consistent witn other daly
( * land maunum ftr.es.
Maqazines 1$ - I VARIES S - 1
S - IS - i
J - Maximum Una changed so mat It wipe comment with other maiimura tnte.
Paperback (Catalogued) t -
S - l$ - i
Paperback (Uncataloqued)
[S - >S 150 : $ - !
, . 1. .
Maun urn fine Increased at an incentive for paffor.s Is return material a a emery
S • manner. Currant mailmum ot $0.50 is not sufficient.
i Art Prints
S IS
S - Oont hava an prints m circuiaQon anymore.
Video & DVD
I I
I ' I
S - i S (5.00): S (1.00)1
S(10.00)
$ (1.00)
AduP. maunum ana reduced to mate £ consistent trith other maonun lata. Fact
jtbninatad lor chsiren and latns consistent with poky nol to Oiarga lata Ittt to
S (10 00) thia group ol users.
Supplemental Materials/Booklets
S - I
S - Hams artnl catalogued and ara not ncted Fines nol generaty asstssad.
Sheet Music
1 VARIES ; VARIES : S -
s -
Daly and maximum Unas changed so that they would ta continent «w other dae>
$ and maximum (lots.
Orchestral Material/Music Sets IS - IS • S - !
s -
s - 1
Vertical File Materials | 1 S - IS - S - i
S IS
s - 1
FEES
Per Day
Max I Per Day
Max
Per Day
EXPLANATION OF CHANGE
Library Card Replacement
S (1.00)
s •
purcnaseig a debit card 'or St 00 and registering it as a etwarv card Re; srate- is
iret Thi Ubrary w* contnua Is cnarga SI 00 to pawnt who ds aot want 10 ouya
S deb* card
Visitors Card (Non-California Resident)
S (10.00)
S (10.00)
te nctudct SI0 refundable depott ater 3 months. Depose, was mposad
to ensure return of materials Currently, mcst non-Stiia cards are issued lor
$(10.00) witemel access and notlsroooU. Ccnxeouency. ana deposit * not rtourad.
Processing fee (lost catalogued material)
S ■ I
s -
S - i
Processing fee (lost uncatalogued material) 1
•-
S [2jOO)I
S (100)
S (2.00) coded
Books by Mail
I
S 3.00 I
S 3.00
New lee Covers cost of snipping and ranging ol pools ffiat ara mated to pama*
S 3.00 Actual amount charge wii be S3 o- the actual cost of snipping and nandaeo.
Interlibrary Loan (ILL)
;
i .. .
S (0.50)!
S (0.50)
'
Fee eammaied to enhance the use olthe coaactssn and to enprsve put* serve*.
S (0.50) fees deter patrons from access to eoleewn. Vary mmenat impact on revenue
Reserve Fee
S (0.50)
S (0.50)
Fees deutr patrons txm access to co section. Very mourn aJ en pact on re ve nut
Met: reserves are made ma eraea/computer eamoabng Ova coat of post card and
S (0.50) postage.
Returned Check Fee
s -
'
N/A I
| Recovery of Delinquent Accounts ! per AcdJ S 10.00 j
s •
New lee. Ltorary has contracted e« a coitction servxe to pursua matanata Ml
$ are 90 dayi late and valued over SSfl.
i Interlibrary Loan (ILL) Photocopy Fee | per page! $ 0.10 i per page
S 0.10 I per page
S 0.1C increased Is reflect cost ol espying.
I SF History Center Photocopy Fee | per photc S - ; per photc
S | perphob
s -
I SF History Center Reproduction Fee I S - I
S • I
s -
Barcode Label
IS • i
s -
-
s -
Damaged Barcode & Flyleaf
■IS 1.00 I
S 1.00
S 1.00 labor eitenslve process a* bar code is damaged
Crayoning a single page
I S (0.25) i
S (025)
Fm e --mated as 4 a dtfGcus or enposaitua to detarmeie whether damage was a
S (0.25) pre-exrstrg condition. Admirusffatrveiy u na a lorca able.
Damaged Date Due Slip
S (0.10)1 •
S (0.10)
Fee eemwated as « bj diflciil or enpsuaie to determine whether damage was a
$ (0.10) pre-aiutng condition. Adraimstratrvaiy «nenlorceab«
Damaged Mylar Book Cover
" " - IS (0.25)!
S (0.25)
Fee etrruhated as it a til<ut or enpotsibw. to dettrmm* w he mar damage was a
$ (0.25) pre-eiotng condition. Ad ewHHalioS) earnifcrceabie
Damaged Plastic PD Sleeve
| S (1.00);
S (100
- ■
Fee eimmaled as » is dimcue. or enpotSJOie to dete— i-e vrtether damage mi
S (1 .00) prt-exisung condWoa. Admnitntvety unentorceab*
-ME00008.xls
44
Source: SF Public Library
ftLi.aciU'JKLlL .
Pa<*e T of 2
JK-.O00
LIBRARY FINES FEES
g^^^-^a^aiia^i^illggg^^gaBg-agsasBsa |
EXPLANATION OF CHANGE
REPLACEMENT COSTS
Perltem| Max | Per Item] Max | Per ltem| Max |
EXPLANATION OF CHANGE
Hardback Non-fiction
$ 10.00 ; $ 10.00 i $ 10.00 | $ 10.00 IS 8.00 I $ 8.00 I
Hardback Fiction
$ 7.00 i $ 7.00 ! $ 7.00 I $ 7.00 IS 3.00 I S 100 1
Paperback Catalogued Non-fiction
$ 20.00 i S 10.00 I $ 20.00 i $ 10.00 I $ 10.00 I $ 5.00 !
Paperback Catalogued Fiction
$ 10.00 I S 10.00 i $ 10.00 I $ 10.00 I S 5.00 I $ 5.00 j
Paperback Uncatalogued
$ - is - Is - IS - IS - IS - I
PB/HB International Generic Record
S - !$ 5.00 ' S - IS 5.00 | $ - |$ 5.00 : Revised amounts reflect current replacement costs for various materials.
Periodicals/Magazines
$ 2.00 i $ - i$ ZOO'S - IS 2.00 I $ - iThese amounts are used only when materials cannot be located or found
Phonorecords
S 6.00 i $ 20.00 S 6.00 ! $ 20.00 j S 6.00 i $ 20.00 llhrough a bibDographic services such as Amazon.Com or Bowkers Annual.
Audio Cassettes
$ (1.00)1 S - 1$ (1.00)1$ - |$ (1.0O)| S - 1 Estimated that less than 5% of materials cannot be located through these
Videos
VARIES ! VARIES 1 VARIES ! VARIES 1 VARIES j VARIES sources. The Library will assess fair market value for lost items based on
Diqital Video Disc (DVD)
$ 20.00 I S 25.00 i S 20.00 I S 25.00 ! S 20.00 | $ 25.00 quotes from bibliographic sources. Replacement charges are in addition to
Audio Books
$ - | N/A I S - 1 N/A i S - 1 N/A 1 processing fees.
! Sheet Music Scores
j NO CHANGE 1
Sheet Music (Uncatalogued)
i I NO CHANGE
Sup. Materials (I.e., booklets, maps, etc.)
s . ]■■- |s - lv.- -..—-Is -
■---.- . : " |
Compact Discs
VARIES 1 $ 20.00 1 VARIES 1 $ 20.00 1 VARIES
$ 20.00 iNewfee. DVDs a growing part of the Library's circulation.
Lanquage Sets
$ - |v ■■■:■:
s -
$ -
Vertical File/Picture File
S 3.00| -
$ 3.00
$ 3.00
■ :"
I Lost Audio Cassette Case
$ - 1 -
S - -:
$ -
i Lost Videocassette Case
1$ [1.00)1
$ (1.00)1 .
$ (1.00)
-■:■ -
! Lost CD Jewel Case
|$ 1.00 1
$ 1.00 |
S 1.00
~-'.'~ ■
Source: SF Public Library
45
'2/15/01
DEPARTMENTAL REVENUE
Public Library
Attachment III
ACTUAL PROJECTED
FY 1 999-2000 ANNUAL REVENUE
Books Paid
Fines & Fees
Reserves
ILL Fee
43,261
$
41,548
418,819
$
479,512
14,814
$
14,901
3,691
$
1.665
480,585 $
537,626
FY 1999-00 per FAMIS.
No decreases in departmental revenues are expected as a result of the proposed
fine and fee schedule.
he
Attachment IV
jus Page 1 of ?.
■'i . SUPPLEMENTAL MATERIAL
FINES & FEES ORDINANCE AND FORTUNIO RESOLUTION
December 19, 2000
FINES & FEES
How were fines & fees determined? What process did the library qo through to
determine the new fee schedule?
The revision of the fines and fees schedule has been under consideration by the Library
for more than seven years (since 1994). The key factors considered in this review
were customer-friendly policies and policies that best protected the Library's collection.
Fines and fees schedules for other public libraries in the Bay Area were surveyed to
determine regional benchmarks and best practices in this area. The impact of newer
formats, services and technologies also was a determining factor in revising the fines
and fees schedule. For example, the implementation of a vendor-supplied debit card -
which provides library cards with $1 .00 photocopy value for the price of $1 .00 - was
inconsistent with the standard library charge of $2 for a replacement library card. Other
new services include the implementation of a collection recovery program aimed at
protecting the collection (see below for details) and a books-by-mail service for
customer convenience.
The fines & fees schedule was determined after many meetings of the public services
staff and review and approval by the Library Commission at several public meetings.
The proposed schedule reflects modern techniques of pricing materials and includes
new media formats (DVD). One of the most important changes for customer service is
the elimination of the $.50 charge for reserves for materials owned by the Library and
materials borrowed from other libraries. Elimination of this charge makes the entire
collection available for anyone's use, no matter which branch they choose to visit. The
proposed fines and fees schedule was devised to serve as an incentive plan to return
materials in a timely manner.
What is the relationship between the fines assessed and the cost to the library?
Fines for overdue materials act as an abatement to the cost of sending out notices that
remind people to return their materials. The cost of replacement of lost materials has
been modified to reflect that the most up-to-date information sources will be checked to
determine that cost. If that information is not available, then a default "standard price" of
materials will be used, which is based on current average pricing for materials. The
application of a consistent "processing fee" attempts to recover a portion of the library's
investment in the average cost of cataloging and processing materials. If there is no
processing or cataloging (i.e. paperback books), we are recommending that the
processing fee not be applied.
The Library's Mission Statement states "The Library is dedicated to free and equal
access to information...." To effect this mission, the public and the staff believe that it is
in the best interest of the library to make all of its materials accessible via reserves to all
patrons for free. Similarly, since we are not charged for the interlibrary loan of books
from other libraries, the staff and public believes the Library should not charge
customers for access to the materials of other libraries.
Source: SF Public Librarv
Attachment IV
Pape 'I of 2
SUPPLEMENTAL MATERIAL
FINES & FEES ORDINANCE AND FORTUNIO RESOLUTION
December 19, 2000
How will the collection program work? Who gets referred and what criteria will be
used?
Customers who have not returned materials worth more than $50.00 that are more than
45 days overdue will be electronically sent to the Collection Agency by the Library's
automated system. Currently, library customers receive only one notice when material is
overdue. With the Collections process, the Library will implement a second overdue
notice to alert customers that not returning materials may result in the referral of their
account to a collection agency. We have a written agreement with the Tax Collector to
assume this collection duty through a third party library vendor. We believe that lowered
fines and fees combined with a collection agency program will stimulate both the use
and the return of library items.
Source: SF Public Library
5.25
*/>/
[All Committees]
City and County of San Francisco S°Ye™I!lent Document Section
J J ~ Main Library
Meeting Minutes
Finance Committee
Members: Supervisors Mark Leno, Aaron Peskin and Matt Gonzalez
Clerk: Gail Johnson
Wednesday, February 28, 2001 10:00 AM City Hall, Room 263
Regular Meeting
Members Present: Mark Leno, Aaron Peskin, Matt Gonzalez.
DOCUMENTS DEPT
MEETING CONVENED
MAR
The meeting convened at 10:08 a.m. SAN FRANCISCO
PUBLIC LIBRARY
002067 [Library Fines and Fees]
Supervisor Newsom
Ordinance amending the San Francisco Administrative Code by adding Section 8.21-2 to authorize the Library
Commission to charge certain fines and fees for the use of library materials and services and ratifying prior
fines and fees.
1 1/20/00, ASSIGNED UNDER 30 DAY RULE to Audit and Government Efficiency Committee, expires on 12/20/2000. Sponsor:
Supervisor Kaufman
1/2/01, RECOMMENDED AS COMMITTEE REPORT. Heard in Committee. Speakers: Susan Hildreth, City Librarian; Supervisor
Katz; Peter Warfield.
To Board as Committee Report January 2, 2001.
1/2/01 , PASSED, ON FIRST READING. Supervisor Newsom requested to be added as co-sponsor.
1/16/01, SEVERED FROM CONSENT AGENDA. Supervisor Yee requested this matter be severed so it could be considered separately.
1/16/01, RE-REFERRED to Audit and Government Efficiency Committee.
2/1/01, TRANSFERRED to Finance Committee. New committee structure.
2/21/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Susan Hildreth, Acting City Librarian; Dorothy
Copely, Public Library; Edward Harrington, Controller; George Nichols, Finance Director, Public Library; James Chafee; Theodore
Lakey, Deputy City Attorney; Peter Warfield; Nicole Termini; Deetje Boler; Michael FaiTah, Legislative Assistant to Supervisor
Newsom.
Continued to 2/28/01.
Heard in Committee. Speakers: Susan Hildreth, Acting City Librarian; James Chafee; Timothy West, Field
Representative, Local 790; Peter Warfield; Deetje Boler; George Nichols, Finance Director, Public Library.
Amended on page 5 by adding Section 2, listing the conditions under which the Board of Supervisors is
approving the agreement between the Public Library and Unique Management Collection Agency for the
recovery of delinquent accounts.
AMENDED.
RECOMMENDED AS AMENDED by the following vote:
Ayes: 2 - Leno, Peskin
Noes: 1 - Gonzalez
City and County of San Francisco I Printed at 7:38 PM on 3/1/01
Finance Committee
Meeting Minutes
February 28, 2001
010105 [Geographic Information System Data License Fees]
Ordinance amending the San Francisco Administrative Code by adding Section 8.40 to authorize the
Department of Public Works to charge license fees for the use of the City's Base Map Geographic Information
System ("GIS") data and ratifying prior fees. (Public Works Department)
1/17/0!, RECEIVED AND ASSIGNED to Transportation and Land Use Committee.
2/1/01, TRANSFERRED to Finance Committee. New committee structure.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Douglas Legg, Finance and Budget Division,
Department of Public Works; Jeffrey Johnson, Office of Geographic Data Services, Department of Public
Works; Denise Brady, Deputy Director, Department of Telecommunications and Information Services; Erin
McGrath, Mayor's Budget Office, Theodore Lakey, Deputy City Attorney.
CONTINUED TO CALL OF THE CHAIR by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
010252 [Reserved Funds, PUC-Water Department!
Hearing to consider release of reserved funds, Water Department (fiscal year 2000-2001 budget), in the amount
of $51 1,891, to fund overtime expenditures, especially in responding to emergencies such as mam breaks and
service line leaks. (Water Department)
2/7/01, RECEIVED AND ASSIGNED to Finance Committee.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Kingsley Okereke, Director of Finance, Public
Utilities Commission; John Mullane, General Manager, Public Utilities Commission.
Release of reserved funds in the amount of $51 1,891 approved.
APPROVED AND FILED by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
010208 [Government funding, Hetch Hetchy's power purchases)
Ordinance appropriating $25,400,000 of Hetch Hetchy Operating Fund to fund the purchase of power to meet
municipal and contractual obligations for fiscal year 2000-01. (Controller)
(Fiscal impact.)
1/31/01 , RECEIVED AND ASSIGNED to Finance Committee.
2/21/01, CONTINUED. Heard in Committee. Speakers: None.
Continued to 2/28/01.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Laurie Park, Acting General Manager, Hetch
Hetchy Water and Power; Ken Bruce, Budget Analyst's Office; Theodore Lakey, Deputy City Attorney;
Theresa Mueller, Deputy City Attorney; John Bardis.
Amendment of the Whole prepared in Committee, v,hich amended funding sources and placed SI, 781,912 on
reserve.
(Hetch Hetchy was requested to provide a report to the Finance Committee on the status of Hetch Hetchy's
projected deficit for the purchase of electrical power for resale by May 1, 2001.)
AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE.
Ordinance appropriating $25,400,000 of Hetch Hetchy Operating Fund to fund the purchase of power to meet
municipal and contractual obligations for fiscal year 2000-01; placing $1,781,912 on reserve. (Controller)
(Fiscal impact.)
RECOMMENDED AS AMENDED by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
City and County of San Francisco
Printed at 7:38 PM on 3/1/01
Finance Committee
Meeting Minutes
February 28, 2001
010145 [Sublease of Treasure Island Brig Facility for Sheriffs Department]
Resolution approving a sublease, retroactive to July 1, 2000, between the City and County of San Francisco
(The "City") and the Treasure Island Development Authority (The "Authority") for certain property on
Treasure Island commonly known as the Brig (Buildings 670 and 671) located at the corner of 13th and M
Streets on Treasure Island, for an annual rent not to exceed 5250,000 per year. (Real Estate Department)
(Fiscal impact.)
1/24/01, RECErVED AND ASSIGNED to Finance Committee.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Michael Hennessey, Sheriff; Jean Mariani,
Chief Financial Officer, Sheriffs Department; Annemarie Conroy, Executive Director, Treasure Island
Development Authority; Anthony Delucchi, Director of Property, Real Estate Division, Administrative Services
Department.
Continued to 3/14/01.
CONTINUED by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
010270 [Appropriation, funding for earthquake relief to India]
Mayor, Supervisor Peskin
Ordinance appropriating 5100,000 from the General Fund Reserve for the Indo-American Trade and
Commerce Council's Gujarat Earthquake Relief Fund for fiscal year 2000-01.
2/12/01, RECEIVED AND ASSIGNED to Finance Committee.
Heard in Committee. Speaker: Harvey Rose, Budget Analyst.
RECOMMENDED by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
010273 [Appropriation, funding the increase of services of the Budget Analyst]
Supervisors Ammiano, Gonzalez
Ordinance appropriating $218,208 of the General Reserve Fund to fluid the increase of services provided by
the Board of Supervisor's Budget Analyst for fiscal year 2000-01.
2/12/01, RECEIVED AND ASSIGNED to Finance Committee.
2/20/01 , SUBSTITUTED. Supervisor Ammiano submitted a substitute ordinance bearing same title.
2/20/01, ASSIGNED to Finance Committee.
Heard in Committee. Speakers: Supervisor Ammiano; Ken Bruce, Budget Analyst's Office; Edward
Harrington, Controller.
RECOMMENDED by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
City and County of San Francisco
Printed at 7:39 PM on 3/1/01
Finance Committee Meeting Minutes February 28, 2001
010223 [Transfer of state funds to improve access to mental health treatment for children in foster care and
other children placed outside of San Francisco)
Resolution endorsing the transfer of state general funds from the state to the California Mental Health Directors
Association for a contract to provide services to foster care and other Medi-Cal eligible children placed outside
of San Francisco. (Public Health Department)
2/2/01, RECEIVED AND ASSIGNED to Public Health and Environment Committee.
2/22/01, TRANSFERRED to Finance Committee.
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Dr. Albert Eng, Department of Public Health.
RECOMMENDED., by the following vote:
Ayes: 3 - Leno, Peskin, Gonzalez
ADJOURNMENT
The meeting adjourned at 1:51 p.m.
City and County of San Francisco 4 Printed at 7:39 PM on 3/1/01
1
a.8/01
CITY AND COUNTY
BOARD OF SUPERVISORS
[Budget Analyst Report]
Susan Horn
Main Library-Govt. Doc. Section
ofsanfrancisccOOCUMENTS DEPT
FEB 2 8 202)
SAN FRANCISCO
PUBLIC LIBRARY
1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642
BUDGET ANALYST
FAX (415) 252-0461
February 22, 2001
TO: ^Finance Committee
FROM: /Budget Analyst
SUBJECT: February 28, 2001 Finance Committee Meeting
Item 1 -File 00-2067
Note: This item was continued by the Finance Committee at its meeting of
February 21, 2001.
Department:
Item:
Description:
Public Library
Ordinance amending the San Francisco Administrative
Code by adding Section 8.21-2 to authorize the Library
Commission to revise certain fines and fees for the use of
library materials and services and ratifying prior fines
and fees.
The proposed ordinance amends Chapter 8 of the San
Francisco Administrative Code by adding Section 8.21-2,
to:
• Add a fee schedule for overdue fines, library card
replacement, processing fees, replacement of lost
materials, lost/damaged fees, service fees, document
delivery and special services.
Ratify prior fees and fines.
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
Attachment I, provided by the Public Library, provides an
overview of the Library's existing and proposed fines and
fees, as contained in the proposed ordinance.
Attachment II, provided by the Public Library, identifies
the amount of change for each fine and fee and provides
an explanation of the differences between the Public
Library's existing fines and fees and the proposed fines
and fees. According to Mr. George Nichols of the Public
Library, the largest decrease in revenue would result from
the elimination of both the $0.50 Interlibrary Loan Fee1
and the $0.50 Reserve Fee2, which are proposed to be
deleted in order to enhance the public's use of the
Library's collection. According to Mr. Nichols, eliminating
the Interlibrary Loan Fee and Reserve Fee will result in a
revenue loss of approximately $16,000 annually.
One of the proposed new fees is a $10 fee for the Recovei
of Delinquent Accounts. The Public Library has recently
contracted with the Unique Management Collection
Agency, selected through a Request for Proposals process,
to pursue delinquent accounts that are 90 days late, with
a total value of at least $50.00 per account. According to
Mr. Nichols, this new $10 Recovery of Delinquent
Accounts Fee would cover the cost of the collection service
as well as the Public Library's cost of processing returned
materials. Of the $10 Recovery of Delinquent Accounts
Fee, $8.95 would be paid to the collection agency and
$1.05 would be kept by the Public Library. Mr. Nichols
states that although the Public Library's purpose in
implementing this collection program is to recover
overdue books and materials, additional revenue will
result from the Recovery of Delinquent Accounts Fee as
well as from fines and fees paid when overdue materials
are returned. Furthermore, Mr. Nichols states that costs
1 The $0.50 Interlibrary Loan Fee is currently charged to Public Library patrons when they request a
book or other items that are not available in the San Francisco Public Library system. The
Interlibrary Loan Fee covers the cost of notifying the patron that the material requested from
libraries in other jurisdictions has been received by the Public Library and is available for loan.
2 The $0.50 Reserve Fee is currently charged to Public Library patrons when they request a book or
other item that is stocked by the Public Library but is not available because it has been checked out.
The Reserve Fee covers the cost of notifying the patron that the material requested has been
returned, placed on reserve, and is available to be checked out.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
would be avoided as returned materials would not have to
be replaced.
Comments: 1. As shown in Attachment III, provided by the Public
Library, the estimated annual revenues to be realized
from the Public Library's revised fine and fee schedule
would be $521,060 which is approximately an increase of
8.4 percent or $40,475 more than the actual fines and fees
of $480,585 collected by the Public Library in FY 1999-
2000.
2. Mr. Nichols states that the amount of fines and fees to
be collected on an annual basis should fully recover the
Public Library's costs including the costs paid to the
collection agency as well as the Public Library's costs to
replace lost, stolen, or damaged materials and other
related processing costs.
3. Attachment rV, provided by the Public Library,
provides information as to how the proposed fines and
fees were determined. According to Mr. Nichols, the
proposed fines and fees schedule was approved on
September 5, 2000 by the Library Commission. Mr.
Nichols reports that the Public Library's fines and fees
were last revised in 1994.
4. According to Ms. Susan Hildreth of the Public Library,
the only fine or fee not currently in effect is the $10
Recovery of Delinquent Accounts Fee.
5. According to Mr. Buck Delventhal of the City
Attorney's Office, prior to the City's 1996 Charter, the
Library Commission had the authority to set the Public
Library's fines and fees. In accordance with the 1996
Charter Section 2.109, the Board of Supervisors must
approve by ordinance any rate, fee, or similar charge to be
imposed by any City department. Currently there is no
section in the City's Administrative Code for Library fines
and fees. Mr. Delventhal states that the proposed
ordinance would establish the fines and fees of the Public
Library as well as ratify (a) the existing fines and fees and
(b) the proposed revised fines and fees.
BOARD OF SUPERVISORS
BUDGET ANALYST
3
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
6. Ms. Hildreth was requested to report back to the
Committee with respect to the Committee's concerns
pertaining (a) to the collection agency contract and
procedures and (b) various other Library policies and
procedures.
Recommendation: Approval of the proposed ordinance is a policy matter for
the Board of Supervisors.
BOARD OF SUPERVISORS
BUDGET ANALYST
4
'Attachment I
Paze 1 of 2
„ viwaa.
LIBRARY FINES FEES
- "—{3 w
ss»^s^5sa
iBUsfcayi
BlH
ADULT
TEENS
JUVENILES
ADULT TEENS
JUVENILES
FINES
Per Day | Max | Per
Day | Max
Per Day | Max | | Per Day | Max
Per Day | Max
Per Day I Max
Books
S 0.10 IS 5.00 | $
- IS -
S - IS - I IS 0.10 IS 5.00
S - IS -
$ - |$ -
Fhonorecords
S 0.10 | S 5.00 I S
- IS -
S - |S - I IS 0.10IS 5.00
s - is -
s - Is -
Audio Cassettes
S 0.10 I S 5.00
S
- is -
S - IS - |
S 0.10 |S 5.00
s - Is -
S - IS -
Books on Tape
S 0.10 I $ 5.00
s
- IS -
s - Is - | •
S 0.10 I S 5.00
s - is -
$ - IS -
Compact Discs
I
S 0.50 | S 10.00
$
- is -
S - 1 S - 1 1 S 0.10 1 S 5.00 1 $ -
s -
S - 13 -
Magazines
S 0.10 I Cost i i
- IS -
S - |S - MS 0.10 IS 5.00 Is -
s -
s -
s -
Paperback (Catalogued)
S 0.10 I S 5.00 | S
- IS -
S - IS - I
S 0.10 | S 5.00 | S -
s -
s -
s -
Paperback (Uncatalogued)
S 0.10
S 0.50
s
- Is -
s -
. . I
S 0.10 ! S 2.00
s -
s -
s -
s -
Art Prints
S 1.00 | S 10.00
I
- is -
s -
S • I
s - Is -
s -
s -
s -
s -
Video & DVD
S 1.00
S 10.00
s
1.00
S 10.00
S 1.00
S 10.00 !
S 1.00
S 5.00
s -
s -
s -
s -
Supplemental Materials/Booklets
S 0.25 I $ 3.00 | S
- IS -
s - Is - | is -
s -
s -
s -
S - !-S -
Sheet Music
Varies
Varies
$
- IS -
s -
s •
S 0.10
S 5.00
s -
s -
s -
s -
Orchestral Material/Music Sets
S 0.25 ! S 10.00
3
■ is -
S - IS - I j S 0.25 1 S 10.00
s •
s -
S - IS -
Vertical File Materials
$ 0.10 IS 5.00 | S
- IS -
S - | S - I | S 0.10 1 S 5.00
s -
s -
S - IS - I
FEES
Per Day j Max | Per Day
Max
Per Day
Max
Per Day
Max j Per Day
Max
Per Day
Max
Library Card Replacement
Vl~
S 2.00 |%5 --■
S 0.50
Wi
S 0.50
- 81
s 1.00 teasS?
S 0.50
_-T :-^:
S 0.50
Visitors Card (Non-California Resident)
S 20.00
S 20.00
S 20.00
-M
S 10.00
S 10.00
S 10.00
Processing fee (lost catalogued material)
~--7Zj^r
S 5.00
S 5.00 h^dggg
S 5.00 |
...--- -"■•:.
S 5.00
"->-.:-/.
S 5.00
7:,---i
S 5.00
Processing fee (lost uncatalogued material) \OM¥~:
S 2.00 k-~ --I S 2.00 fjjgjgaa
S 2.00 I
-:'.-;i"':
s -
rjM.':t
S ■ I
Books by Mail
s -
■■: ; %
s -
;->;:-.-"
S • I
~S^S
S 3.00
y--:
S 3.C0
::-
S 3.00
Interlibrary Loan (ILL)
-
S 0.50
i-Sz-:
S 0.50
J.Ii}-.-
S 0.50 !
:'■ %
s -
s -
s ■
Reserve Fee
S 0.50
\
S 0.50 \i'.^£-
S 0.50 j
'^W
s -
:>f-:
s •
s •
Returned Check Fee | perChk.
S 10.00 I - " IS 10.00 1 V~v:
N/A I | perChk.
s 10.00 1 :-
S 10.00
'
N/A
Recovery of Delinquent Accounts
s • 1 -.-:-:
r
i m
i I perAcct
S 10.00
-
I
Interlibrary Loan (ILL) Photocopy Fee | per page
S 0.15;perpage
S 0.15 | per page
S 0.15 ' I per page
S 0.25
per page
S 0.25 t per page
S 0.25
SF History Center Photocopy Fee I per photc
S 1.00 i per photc S 1.00 ! per photc
S 1.00 : I per photc
S 1.00
per photc
S 1.00 | per photc
S 1.00
SF History Center Reproduction Fee
S 15.00 i_„ |S 15.00 !-:--/-
S 15.00 | |
S 15.00
-
S 15.00 I ------,?,
S 15.00
Barcode Label
Ec£ :1
S 0.25 I |S 0.25 I-
S 0.25 :
S 0.25
S 0.25 I
S 0.25
Damaged Barcode & Flyleaf
S -
IS - !-■
i ■ ■ \
S 1.00
- -
5 1.00 [ ..
S 1.00
I Crayoning a single page
S 0.25
S 0.25
% 0.25 ' I : '
s •
%
S -
s -
| Damaged Date Due Slip
S 0.10
$ 0.10 i . ' •":
i i : --
s o.io ; I s*5l
s -
s -
-
s •
I
1
1
1
| Damaged Mylar Book Cover
S 0.25 I
S 0.25 |
S 0.25 '
s -
s -
"
s -
i
| Damaged Plastic PD Sleeve
S 1.00
!'
S 1.00
| - i
I
I . -
S 1.00
1
Is •
.
s -
s -
Source: SF Public Library
12f'.9«J8'.
LIBRARY FINES FEES
Attachment I
Page 2 of 2
■:--■: CURRENTS .-_■■.:■•■
ADULT TEENS JUVENILES
PROPOSED
ADULT TEENS JUVENILES
REPLACEMENT COSTS
Per Item | Max Per Item | Max | Per Item Max | Per Item | Max | Per llern) Max |per!tem| Max
Hardback Non-fiction
S 25.00 | $ 30.00
S 25.00 I S 30.00 I S 12.00 I S 17.00 I I S 35.00 I $ 40.00 | S 35.00
S 40.00 I S 20.00 | S 25.00
Hardback Fiction
$ 18.00 | $ 23.00
S 18.00 I S 23.00 I S 12.00 I S 18.00 i I S 25.00 S 30.00 | $ 25.00
S 30.00
S 15.00
S 20.00
Paperback Catalogued Non-fiction
S - $ 15.00 | $ - | $ 15.00 IS - | $ 10.00 1 | S 20.00 I $ 25.00 ! $ 20.00 | S 25.00
S 10.00
S 15.00
Paperback Catalogued Fiction
J -
$ 5.00 I S - I $ 5.00 I $ - | S 5.00 I | $ 10.00
S 15.00
S 10.00
S 15.00
S 5.00 | S 10.00
Paperback Uncatalogued
S 5.00
S • |S 5.00 IS - l$ 5.00 IS • ! IS 5.00
S -
S 5.00
s •
S 5.00 | S •
PB/HB International Generic Record
S 5.00 1 $ 10.00 IS 5.00 I S 10.00 I S 5.00 I $ 10.00 I I $ 5.0C | J 15.00
S 5.00
S 15.00
S 5.00 I S 15.00
Periodicals/Magazines
S 3.00 I $ - | S 3.00 I S - | S 3.00 | S • | I S 5.00 | S -
S 5.00
s -
S 5.00 IS ■
Phonorecords
S 9.00 |S - | S 9.00
S - I S 9.00 I S - I |$ 15.00 I S 20.00
S 15.00
S 20.00
S 15.00
S 20.00
Audio Cassettes
S 11.00 js - IS 11.00
S - I S 11.00 I S - I I S 10.00 I s -
S 10.00
s -
S 10.00
s -
Videos
VARIES I VARIES I VARIES I VARIES I VARIES I VARIES I I S 20.00 I S 25.00
S 20.00
S 25.00
S 20.00
s 29 ::
Digital Video Disc (DVD)
S - I S - I S - I S - I S - | S - | | S 20.00 1 S 25.00
S 20.00
S 2500 I S 20.00
S 25.00
Audio Books
$ 5.00 I per tape JS 5.00 I per tape ! $ 5.00 J per tape ' IS 5.00
per tape
S 5.00
per tape '. S 5.00
per tape
Sheet Music Scores
I SET BY ART DEPARTMENT I
SET BY ART DEPARTMENT
Sheet Music (Uncatalogued)
I SET BY ART DEPARTMENT
•mat
SET BY ART DEPARTMENT
Compact Discs
VARIES I I VARIES
VARIES
S I5J0C
12000
S 15.00 I S 20.00
S 3.00
S 15.00
■ '■ -■ 1 — 1
S 20.00 1
Language Sets
S 10.00 I
S 10.00 | :
S 10.00 1 3
1 S 10.00
s 10.00 Ke$p#
s •: x
Vertical File/Picture File
S Z00|:<-1
S 2.00
£ - —
S Z0OK
> S 5.00
S 5.00
S 5.00
-:-•-.
Lost Audio Cassette Case
S 1.00
S 1.00
S 1.00 I-
IS 1.00 If
S 1.00 R!
S 1.00
Lost Videocassette Case
S 3.00
-
S 3.00
S 3.00 t r
IS zoo
■
S 2.00 I ;.- .-/.-■■-
s ZOO
Lost CD Jewel Case
s -
-
s -
s - 1
l$ 1.00
S 1.00 {— <
S 1.00 |.ti
Source: SF Public Library
i»tf»/oo
LIBRARY FINES FEES
Attachment II
Paee 1 ot 2
jS5K%fr£- - rCH£NG&-^_- ------- i EXPLANATION QF CHANGE
ADULT TEENS JUVENILES
FINES
| Per Day | Max | Per Day | Max | Per Day | Max |
Books
$ - .IS - IS - IS - IS - IS - I
Phonorecords
s - Is - IS - |S - Is -
5 - |
Audio Cassettes
~Ts - Is - is - Is - is -
$ - I
Books on Tape
is - Is - Is - IS - is -
s - I
Compact Discs
I S (0.40) $ (5.00)1 $ - 1 $ - $ -
JDaRy and maximum fines reduced so that they wiB be consistent with other daily
$ - |and maximum fines.
Magazines
fS - I VARIES i$ - |S - |S -
S - iMaximum fine changed so that it win he consistent with other maximum fines.
Paperback (Catalogued)
Is - Is - Is - is -
s -
$ . |
Paperback (Uncatalogued)
s -
S 1.50
s -
s -
s -
[Maximum fine increased as an incentive for patrons to return material in a timely
$ • |manner. Current maximum of SO. SO is not sufficient
Art Prints
I S (1.00)1 S(10.00)i $ - I $ -
S |S | Don'l have art prints In circulation anymore.
Video & DVD
s -
S (5.00)1 S (1.00)| S (10.00)
lAdult maximum line reduced lo make it consistent with other maximum fines. Fees
[eliminated for children and teens consistent with policy not to charge late fees to
$ (1.00) $ (10.00) jthis group of users.
Supplemental Materials/Booklets
S (0.25)i S (3.00)1 $ - 1 S -
S - |S litems arem catalogued and are not tracked. Fines not generally assessed.
Sheet Music
VARIES
VARIES I S -
s -
$ -
lOaflY and maximum fines changed so that they would be consistent with other daly
$ - jand maximum fines.
Orchestral Material/Music Sets
is - Is - Is - Is -
s -
$ - i
Vertical Hie Materials
Is - Is • is - IS - is -
s - I
FEES
Per Day
Max j Per Day
Max
Per Day
EXPLANATION OF CHANGE
Library Card Replacement
■ £vi;=
S (1.00)! ffi
5 -
•~i:j}r-
[purchasing a debit card lor S1.00 and registering it as a library card. Registration is
free. The Library will continue to charge $1.00 to patrons who do not want to buy a
S • Ideal card.
Visitors Card (Non-California Resident)
,_" vfprfe
S (10.00)
. .-■";
S (10.00)
S?4ir4.
jCurrent (ee includes J 1 0 refundable deposit after 3 months. Oeposil was imposed
to ensure return of materials. Currently, most non-State cards are issued for
$ (10.00) [internet access and not for books. Consequenby, the deposit is not required.
Processing fee (lost catalogued material)
--.,-': ;.F.~
s - I -
s -
.- :.-_; ;-.-..
s - I
Processing fee (lost uncatalogued material)
v^:::-:
S (2.00)! t-
S (2.00)h--
S (2.00) [coded.
Boofcs by Mail
; "'.'f^y'
S 3.00
--■'
S 3.00
-yW-:
INew fee. Covers cost of shipping and handling of books that are mailed to patrons.
S 3.00 'Actual amount charge will be S3 or the actual cost of shipping and handling.
Interlibrary Loan (ILL)
;':'■;■'-.-
S (0.50)
-' .
S (0.50)
•'■■
[Fee eliminated to enhance the use of the collection and to improve public service.
S (0.50), Fees deter patrons from access to collection. Very minimal impact on revenue.
Reserve Fee
S (0.50)
S (0.50)
■
iFees deter patrons from access to collection. Very minimal impact on revenue.
jMost reserves are made via email/computer eliminating the cost of post card and
S (0.50)!postage.
Returned Check Fee
\-y-:-^r
$ - I
s -
'- .-
N/A I
j Recovery of Delinquent Accounts
per AccL
s 10.00! . ■■-
s -
,New fee. Library has contracted with a collection service lo pursue materials that |
S - iare 90 days late and valued over 550.
i Interlibrary Loan (ILL) Photocopy Fee I per page
S 0.10 i per page
S 0.10 I per page
S 0.10 Increased to reflect cost of copying.
I SF History Center Photocopy Fee I I per photc
S - I per photd S - I per photc
$ -
i SF History Center Reproduction Fee I | -• • ■ ■..-
S - I
S - |-js
$ - i
Barcode Label
$ - I
S - I",' ■
S - I i
Damaged Barcode & Flyleaf I | -'-■-:--
s 1.00 i
s 1.00 1
$ 1.00 labor intensive process if bar code is damaged.
i Crayoning a single paqe | l~-'i- ':>
S (0.25}|
S (0.25)
:Fee eliminated as it is difficult or impossible lo determine whether damage was a |
$ (0.25) pre-exJsbng condition. Administratively unenforceable.
i Damaged Date Due Slip
S (0.10)1 ■"
S (0.10)1
[Fee eliminated as it is difficult or impossible to determine whether damage was a I
S (0.10) pre-existing condition. Administratively unenforceable.
I Damaged Mylar Book Cover
S (0.25)1
S (0.25)1 "
■Fee eliminated as it is difficult or impossible to determine whether damage was a I
$ (0 25)'pre-exi50ng condition. Administratively unenforceable.
I {"'•■•■•-"
I Damaged Plastic PD Sleeve I -
S (1.00)!
S (1.00)|
;Fee eliminated as It is difficult or impossible to determine whether damage was a
$ (1.00) pre-existing condition. Administratively unenforceable.
-ME0000a.xls
Source: SF Public Library
"iiy&rao
LIBRARY FINES FEES
CHANGE
TEENS JUVENILES
Attachnent II
Pa<*e 2 of 2
EXPLANATION OF CHANGE
REPLACEMENT COSTS
Per Item
Max
Per ltem| Max
Per Item
Max
EXPLANATION OF CHANGE
Hardback Non-fiction
Hardback Fiction
I S 7.00 1 $ 7.00 | $ 7.00 1 $ 7.00 1 J 3.00 1 $ 100 1
Paperback Catalogued Non-fiction
$ 20.00 1 $ 10.00 I $ 20.00 i J 10.00 | $ 10.00 | $ 5.00
Paperback Catalogued Fiction
$ 10.00 I $ 10.00 i $ 10.00 j % 10.00 I $ 5.00
$ 5.00
Paperback Uncatalogued
1$
$ -
PB/HB International Generic Record
S - |$ 5.00 IS - 1 5 5.00 1 $ ■
$ 5.00 ; Revised amounts reflect current replacement costs for various materials.
Periodicals/Magazines
S 2.00 1$ - I $ 2.00 1 5 -
$ 2.00 I $ - |These amounts are used only when materials cannol be located or found
Phonorecords
$ 6.00j$ 20.00 1$ 6.00 1 $20.00
$ 6.00 | $ 20.00 I through a bibfographic services such as Amazon.Com or Bowken Annual
Audio Cassettes
$ (1.00)1 $ - I $ (1.00)| $ -
$ (1 .00) | $ - | Estimated that less than 5% of materials cannot be located through these
Videos
| VARIES 1 VARIES 1 VARIES 1 VARIES I VARIES 1 VARIES Isources. The Library will assess fair markel value for lost item* based on
Diqital Video Disc (DVD)
$ 20.00 1 $ 25.00 i $ 20.00 ! $ 25.00 1 $ 20.00 1 $ 25.00
quotes from bibliographic sources. Replacement chanjes are in addition to
Audio Books
$ -
N/A | $ - I N/A I $ - I N/A
processing fees.
Sheet Music Scores
| NO CHANGE
Sheet Music (Uncatalogued)
I NO CHANGE
Sup. Materials (I.e., booklets, maps, etc.)
$ -
. Is - I - ■•-.!$ -
Compact Discs
VARIES
$ 20.00 I VARIES I $ 20.00 I VARIES
$ 20.00 |New fee. OVOs a growing part of the Library's circulation.
Language Sets
S -
$ - I
$ -
.•;';•:•
Vertical File/Picture File
$ 3.00
■'■--"-- -
$ 3.00 | *
$ 3.00
w- - -
Lost Audio Cassette Case
$ -
$ - I
$ -
:-:~
Lost Videocassette Case
$ (1.00)
-
$ (1.00)1 -.
$ (1.00)
•
Lost CD Jewel Case
$ 1.00
$ 1.00 | -'
$ 1.00
1
Source: SF Public Library
2/20/01
Attachment III
DEPARTMENTAL REVENUE
Public Library
ACTUAL PROJECTED
FY 1999-2000 ANNUAL REVENUE
Books Paid
$
43,261
$
41,548
Fines & Fees
$
418,819
$
479,512
Reserves
$
14,814
$
-
ILL Fee
$
3,691
$
-
480,585 $
521,060
FY 1999-00 per FAMIS.
No decreases in departmental revenues are expected as a result of the proposed
fine and fee schedule.
Attachment IV
a', , ' Page 1 of 2
' .:V . SUPPLEMENTAL MATERIAL
FINES & FEES ORDINANCE AND FORTUNIO RESOLUTION
December 19,2000
FINES & FEES
How were fines & fees determined? What process did the library qo through to
determine the new fee schedule?
The revision of the fines and fees schedule has been under consideration by the Library
for more than seven years (since 1994). The key factors considered in this review
were customer-friendly policies and policies that best protected the Library's collection.
Fines and fees schedules for other public libraries in the Bay Area were surveyed to
determine regional benchmarks and best practices in this area. The impact of newer
formats, services and technologies also was a determining factor in revising the fines
and fees schedule. For example, the implementation of a vendor-supplied debit card -
which provides library cards with $1 .00 photocopy value for the price of $1 .00 - was
inconsistent with the standard library charge of $2 for a replacement library card. Other
new services include the implementation of a collection recovery program aimed at
protecting the collection (see below for details) and a books-by-mail service for
customer convenience.
The fines & fees schedule was determined after many meetings of the public services
staff and review and approval by the Library Commission at several public meetings.
The proposed schedule reflects modern techniques of pricing materials and includes
new media formats (DVD). One of the most important changes for customer service is
the elimination of the $.50 charge for reserves for materials owned by the Library and
materials borrowed from other libraries. Elimination of this charge makes the entire
collection available for anyone's use, no matter which branch they choose to visit. The
proposed fines and fees schedule was devised to serve as an incentive plan to return
materials in a timely manner.
What is the relationship between the fines assessed and the cost to the library?
Fines for overdue materials act as an abatement to the cost of sending out notices that
remind people to return their materials. The cost of replacement of lost materials has
been modified to reflect that the most up-to-date information sources will be checked to
determine that cost. If that information is not available, then a default "standard price" of
materials will be used, which is based on current average pricing for materials. The
application of a consistent "processing fee" attempts to recover a portion of the library's
investment in the average cost of cataloging and processing materials. If there is no
processing or cataloging (i.e. paperback books), we are recommending that the
processing fee not be applied.
The Library's Mission Statement states "The Library is dedicated to free and equal
access to information...." To effect this mission, the public and the staff believe that it is
in the best interest of the library to make all of its materials accessible via reserves to all
patrons for free. Similarly, since we are not charged for the interlibrary loan of books
from other libraries, the staff and public believes the Library should not charge
customers for access to the materials of other libraries.
Source: SF Public Library
10
Attachment IV
Page 2 o.t 2
SUPPLEMENTAL MATERIAL
FINES & FEES ORDINANCE AND FORTUNIO RESOLUTION
December 19, 2000
How will the collection program work? Who gets referred and what criteria will be
used?
Customers who have not returned materials worth more than $50.00 that are more than
45 days overdue will be electronically sent to the Collection Agency by the Library's
automated system. Currently, library customers receive only one notice when material is
overdue. With the Collections process, the Library will implement a second overdue
notice to alert customers that not returning materials may result in the referral of their
account to a collection agency. We have a written agreement with the Tax Collector to
assume this collection duty through a third party library vendor. We believe that lowered
fines and fees combined with a collection agency program will stimulate both the use
and the return of library items.
Source: SF Fublic Library
11
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
Item 2 -File 01-0105
Department:
Item:
Public Works
Ordinance amending the Administrative Code by adding
Section 8.40 to authorize the Department of Public Works
to charge license fees for the use of the City's Base Map
Geographic Information System ("GIS") data and
ratifying the establishment of existing and new license
fees.
Description:
The proposed ordinance amends Chapter 8 of the
Administrative Code by adding Section 8.40, to:
Authorize the Department of Public Works (DPW) to
"charge license fees thereunder that are consistent
with the fair market value of the GIS," and to
establish reduced rates for non-profit organizations as
determined by the Director of DPW. The proposed
ordinance does not identify the specific fee levels.
Authorize the appropriation of the fees to the DPW for
maintenance of the Base Map GIS data.
Ratify existing license fees.
The proposed ordinance provides authority for the
Director of DPW to establish license fees at fair market
value for the use of the City's Base Map GIS data and
that the Director "may establish standard reduced fee
rates for non-profit organization licensees of the GIS."
The DPW Office of Geographical Data Services has
developed and maintains the City's Base Map, which is
formatted for and accessed through GIS software. The
Base Map is comprised of all the Assessor's blocks and
lots, the City's right of way maps, information on the
location and dimensions of curbs and pavement, utility
lines, land use zones, street trees, streetlights, and
seismic hazard zones. City departments use the Base Map
GIS data for a variety of purposes, including facilitating
the street construction permitting process, managing the
sewer and water main system, and assessing earthquake
risk.
BOARD OF SUPERVISORS
BUDGET ANALYST
12
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
According to Mr. Douglas Legg of the DPW, DPW would
charge license fees to third parties through license
agreements with Value Added Resellers (VARs) for the
use of the City's Base Map GIS data. According to Mr.
Legg, third parties include architectural and planning
consulting firms, market research firms, cartographic
firms, and telecommunications entities. To facilitate the
demand by third parties for the City's Base Map GIS
data, according to Mr. Legg, the City Attorney prepared
license agreements between DPW and VARs. Under
contract with the City, the VARs are authorized to sub-
license the City's Base Map GIS data to third parties.
According to Ms. Tina Olson of DPW, the VAR
agreements are not subject to Board of Supervisors
approval because under Charter Section 9.118 the VAR
agreements that do not have anticipated revenue to the
City of $1 million or more do not require approval by the
Board of Supervisors. The VARs re-package the Base Map
GIS data, and their products may include software and
training.
DPW began charging fees to various City departments
and the San Francisco Redevelopment Agency in FY
1996-97 to pay for the development and maintenance of
the City's Base Map GIS data. Presently, DPW has work
orders from 12 City departments, the San Francisco
Redevelopment Agency and 5 DPW bureaus. According to
Mr. Legg, DPW entered into license agreements with
three VARs, namely Barclay Mapworks, ValueCad, and
Hammon, Jensen, Wallen and Associates in October of
1998 to market and sub-license the City's Base Map GIS
data to third parties. According to Mr. Legg, these three
VARs were selected based on their familiarity with the
City's Base Map GIS data and experience with marketing
GIS data to third parties. Under current agreements with
the three VARs, which as previously noted are not subject
to Board of Supervisors approval, DPW receives on a
quarterly basis (1) 50 percent of the gross revenue
collected by the three VARs from sub-licensing the City's
Base Map GIS data to third parties, up to the fair market
value (listed price) of the data product, which is currently
$25,000 as established by the Director of DPW, and (2) 10
percent of gross revenue from products developed from
the Base Map by the VARs.
BOARD OF SUPERVISORS
BUDGET ANALYST
13
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
According to Mr. Legg, DPW's future share of the annual
revenue collected by the VAEs from sub-licensing the
City's Base Map GIS data to third parties is expected to
total $65,000. However, DPW has only collected $38,676
from October of 1998 through February 22, 2001. Mr.
Legg reports that the Department anticipates entering
into new licensing agreements in September of 2001 with
VAEs upon the expiration of the existing agreements, and
that DPW estimates annual revenues of $65,000
beginning in FY 2001-02, or $45,000 more than the
estimated revenue anticipated to be realized in FY 2000-
01 of $20,000.
As shown in the Attachment provided by DPW, the cost of
maintaining the City's Base Map GIS data is estimated at
$538,676 for FY 2001-02, and would be covered by the
: Zl following estimated funding sources: (1) $400,000 in
revenue from the budgeted work orders for the City's Base
Map GIS data provided by the 12 City departments, the
San Francisco Redevelopment Agency and 5 DPW
bureaus which participate, (2) $65,000 in revenue from
sub-licensing through VARs the City's Base Map GIS data
to third parties, (3) $38,676 in revenue collected since
October of 1998 from sub-license fees for use by third
parties of the City's Base Map GIS data, and (4) $35,000
in consulting fees charged by DPW to provide technical
assistance to other City departments. According to Mr.
Legg, the $38,676 has never been allocated to DPW.
Therefore, the appropriation of the $38,676 in fees
previously collected would be appropriated to the DPW
under this ordinance.
Comments: 1. As noted in the Attachment provided by DPW, DPW
currently has work orders from 12 City departments, the
San Francisco Redevelopment Agency and 5 DPW
bureaus for the Base Map GIS data. According to DPW,
the work order revenues from the agencies are estimated
to total $400,000 annually.
2. Mr. Legg states that in September of 2001, when the
existing VAR license agreements expire, DPW may enter
into an exclusive agreement with one VAR selected
through a competitive bidding process. That agreement
BOARD OF SUPERVISORS
BUDGET ANALYST
14
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
would not be subject to approval by the Board of
Supervisors.
3. According to Ms. Adine Varah of the City Attorney's
Office, although Charter Section 2.109 provides that the
Board of Supervisors must approve by ordinance any rate,
fee, or similar charge to be imposed by any City
department, the City Attorney's Office has concluded that
Section 2.109 does not apply to the DPW GIS Base Map
data license fees because the DPW, when negotiating and
charging such intellectual property license fees, is
representing the City in its proprietary capacity. Such
intellectual property license fees are thus distinguishable
from fees charged for public facilities or services that are
generally offered to the community. According to Ms.
Varah, therefore, approval of this ordinance would ratify
the existing license fees and authorize the Director of
JQP-W__to_establish_ne w_hcense ~fe es_without_ subseqi
approval by the Board of Supervisors of the specific fees
which are established by DPW.
Currently there is no section in the City's Administrative
Code establishing the existing DPW license fees to be
charged for the use of City's Base Map GIS data. Ms.
Varah states that the proposed ordinance would authorize
the DPW to enter into licensing agreements with VARs
that would sub-license third party use of this Base Map
GIS data and charge license fees thereunder for the use of
the City's Base Map GIS data. In addition, the proposed
ordinance would ratify all existing fees charged by the
City under GIS data license agreements since July 1,
1998, the start date of the fiscal year in which the City
began licensing the Base Map GIS data.
Recommendation: Approval of the proposed ordinance is a policy matter for
the Board of Supervisors.
BOARD OF SUPERVISORS
BUDGET ANALYST
15
.City and County of San Francisco
Willie Lewis Brown, Jr., Mayor
Edwin M. Lee, Director
Attachment
gage 1 of 2(415) 554_4830
FAX (415) 554-7800
http://www.sfdpw.com
Department of Public Works
Finance and Budget Division
Financial Management and Administration
City Hall, Room 348
1 Dr. Carlton B. Goodlett Place
San Francisco, CA 94102-4645
Memorandum
February 22, 2001
To: Anna Weinstein
Board of Supervisor's Budget Analyst's Office
From: Douglas Legg
Division of Finance and Budget
Re: Proposed GIS Fee Ordinance
This memo is in response to questions you have asked regarding the Department of Public Works
proposed GIS fee ordinance and appropriation.
1.
How did we arrive at our annual revenue estimate?
2.
The estimate is based on revenues collected by the Counties of Santa Clara and Los
Angeles and reduced in proportion to San Francisco's relative size. The estimates
were verified through discussions with potential Value Added Resellers (VARs).
What is the budget for the Office of Geographic Data Systems? How will DPW
address a revenue shortfall if proposed fees revenues are not realized as planned?
Expenses
Salaries
$233,727
Fringe Benefits
51,420
Overhead
78,321
Non Labor
26,532
Ortho Photos
148.676
Total
$538,676
Revenues
Work Orders
$400,000
License Fees
65,000
Fee Balance
38,676
Consulting
35.000
Total
$538,676
The work orders are as follows:
"IMPROVING THE QUALITY OF LIFE IN SAN FRANCISCO" We are dedicated individuals committed to teamwork, customer
service and continuous improvement in partnership with the community.
Attachment
Page 2 of 2
Assessor/Recorder
$20,000
City Planning
20,000
DBI
46,000
DPH
20,000
DPT
20,000
DPW-Bureau of Construction Mgmt.
35,000
DPW-Bureau of Architecture
20,000
DPW-Bureau of Engineering
20,000
DPW-Bur. Street Environmental Srvs
20,000
DPW-Bur. Street & Sewer Repair
20,000
DTIS
20,000
Fire Department
20,000
Mayor's OES
19,000
PUC-Bureau of Light, Heat & Power
20,000
PUC-Clean Water
20,000
Real Estate
20,000
SFRA
20,000
Treasurer/Tax Coll.
20.000
Total
S400,000
DPW plans to update the Ortho Photograph layer of the Basemap in the current fiscal
year. Ortho photographs were last updated in 1993 and the Department and subscriber
departments are anxious to for this more accurate and timely data. Should revenues not be
realized in the current fiscal year, expenditure of some non-labor budget items or
purchase of ortho photographs would be delayed until next fiscal year.
3. What is a Value Added Reseller (VAR)? Why is DPW "licensing" VARs to sell the
Basemap data?
A VAR is essentially a broker who markets data or software to interested buyers. City
staff are not trained at marketing or managing contracts to sell data, so we use these
brokers. The City owns the Basemap data, and licenses the VARs to sell it. The VARs in
turn sub-license the data to interested buyers. Under DPW's license agreements with the
VARs, DPW is entitled to a percentage of these receipts. Amongst others, the VARs have
sub-licensed the City's Basemap to e-commerce map companies, and technology
companies that integrate mapping data with cell phone and pager technology.
4. How did DPW decide which VARs to license to sell Basemap data? How will DPW
determine which vendors will be licensed in the future?
The staff person who worked with the City Attorney to develop the license agreements is
no longer with the City. The best information that we have indicates that DPW chose the
current VARs based on their experience with similar municipal organizations and
datasets, as well as their familiarity with the City of San Francisco's Basemap data.
For any new agreement or re-licensing of the Basemap GIS data, DPW will aggressively
seek the best terms possible through competitive negotiations with qualified data
marketing firms.
17
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
Item 3 -File 01-0252
Department:
Item:
Amount:
Source of Funds:
Description:
Public Utilities Commission (PUC)
Water Department
Hearing to consider the release of reserved funds for the
Water Department in the amount of $474,765 to fund
overtime expenditures.
$474,765
Water Department's FY 2000-2001 Budget
The Water Department's FY 2000-2001 budget includes
budgeted overtime expenditures of $1,424,297. During the
FY 2000-01 budget hearings, the Finance and Labor
Committee recommended that one third of annual
Overtime expenditure budgets for several City
departments be placed on reserve so that the Committee
can monitor spending for Overtime during the fiscal year.
Therefore, the Finance and Labor Committee placed a
total of $474,765 of this amount on reserve for the Water
Department, leaving $949,532 available for expenditure.
The table below provides a summary of Overtime
spending to date and projected overtime spending for FY
2000-2001, as well as spending to date and projections for
all Water Department Salary and Fringe Benefit
accounts, including Overtime, based on the Controller's
payroll records.
Controller's Projection -Water Department Expenditures for Overtime and Total
Salaries and Fringe Benefits Including Overtime through February 2, 2001
FY 2000-2001
Budget
Actual
Expenditures
Through Pay
Period Ending
2/2/01
Projected
Expenditures Projected Surplus
Through July 30, (Deficit)
2001 *
Overtime
All Salaries and Fringe
Benefits Including
Overtime
$1,424,297
35,540,372
$1,104,831
20,985,905
$2,039,406
35,556,203
($615,109)
($15,831)
Projections based on spending at the level of the pay period ending
2/2/01 for the remainder of the Fiscal Year.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
As summarized in the table above, the Controller's latest
projection report for salary and fringe benefit expenditures
(including Overtime) shows that:
• As of the pay period ending February 2, 2001, the Water
Department has incurred Overtime expenditures of
$1,104,831.
• Through February 2, 2001 (or 15.5 of 26.0 pay periods in
FY 2000-01) the Water Department has already
expended 77.6 percent of its total Overtime
appropriation of $1,424,297 and 116.4 percent of its
available, unreserved overtime funding of $949,532.
• Based on overtime expenditures incurred during the pay
period ending February 2, 2001, the Controller's
projection indicates that the Water Department will
spend a total of $2,039,406 on overtime, which is
$615,109, or 43.2 percent, more than the Department's
total FY 2000-01 Overtime appropriation of $1,424,297.
• For all Salaries and Fringe Benefit Expenditures,
including overtime, the Controller's projection indicates
that the Water Department will incur total expenditures
of $35,556,203 in FY 2000-2001, which is $15,831, or
0.04 percent, more than the FY 2000-2001 budget
amount of $35,540,372.
Based on the data summarized above, the Water
Department is currently projected to end Fiscal Year 2000-
2001 with a deficit of approximately $615,109 in Overtime
expenditures. However, Mr. Carlos Jacobo of the PUC
advises that the Water Department does not anticipate
requesting a supplemental appropriation for Overtime
expenditures in FY 2000-2001 for the following reasons:
• Mr. Jacobo reports that the Water Department is
currently conducting an internal audit of its Overtime
practices and has detected a variety of accounting errors
in the department's recording of Overtime and that
some charges for Overtime worked on capital projects
were mistakenly applied to the Water Department's
operating budget instead of the specific capital
improvement projects. According to Mr. Jacobo, as part
of the audit the Water Department is reviewing all
BOARD OF SUPERVISORS
BUDGET ANALYST
19
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
Overtime expenditures for Fiscal Year 2000-2001, and
upon completion, the department will reverse incorrect
Overtime charges in order to revise its Overtime
expenditures applied to the operating budget. As of the
writing of this report, Mr. Jacobo estimates that such
revisions will result in a reduction of current Overtime
expenditures as of February 2, 2001 of $1,104,831 by
approximately 10 percent to 20 percent or between
$110,483 and $220,966.
• In addition, Mr. Jacobo advises that the Water
Department is putting into place new procedures and
controls to monitor and restrict the use of overtime.
According to Mr. Jacobo, such procedures and
restrictions will allow the department to reduce
Overtime expenditures for the remainder of Fiscal Year
2000-2001. As a result, the Water Department expects
to end Fiscal Year 2000-2001 without a deficit in
overtime expenditures.
• Further, Mr. Jacobo advises that Overtime expenditures
for the first seven months of Fiscal Year 2000-2001 (July
through January) have been higher than anticipated
due to an unusually high number of emergency repairs
to ruptured water pipelines. Mr. Jacobo anticipates that
the number of such repairs should decline over the
remainder of Fiscal Year 2000-2001.
• According to Mr. Jacobo, should the Water Department
end Fiscal Year 2001-2002 with a deficit in Overtime
spending, the Water Department would fund such an
Overtime deficit with surplus funds from other accounts
in the department. Therefore, Mr. Jacobo anticipates
that the Water Department will not be required to
request a supplemental appropriation for Salaries and
Fringe Benefits including Overtime.
Recommendation: Approve the requested release of $474,765 in reserved
Overtime funds.
BOARD OF SUPERVISORS
BUDGET ANALYST
20
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
Item 4 - File 01-0208
Department:
Item:
Amount:
Source of Funds:
Description:
Public Utilities Commission (PUC)
Hetch Hetchy Water and Power (Hetcb Hetchy)
Ordinance appropriating $25,400,000 of Hetch Hetchy
Operating Fund monies to fund the purchase of electrical
power for resale to meet municipal and contractual
obligations for Fiscal Year 2000-2001.
$25,400,000
Hetch Hetchy operating funds have been identified for the
proposed supplemental appropriation from the following
specific sources:
Source
Amount
Revenue from Sale of Electricity
$10,800,000
De-obligated Capital Projects
7,400,000
Unappropriated Fund Balance
6,200,000
Permanent Salary Savings
1,000,000
Total
=; $25;4oo,oqo
See Comment No. 2 below for further discussion of
funding sources.
As a byproduct of delivering water to the City's Water
Department for sale to the City's retail customers in San
Francisco and wholesale water customers in the Bay
Area, Hetch Hetchy Water and Power also generates
hyrdroelectric power for the City's municipal purposes
and for sale to customers who purchase hydroelectric
power under contracts with the City.
The proposed supplemental appropriation would provide
a total of $25,400,000 to Hetch Hetchy to fund the
purchase of electrical power for resale.1 Hetch Hetchy has
historically purchased wholesale power on the spot
market for electricity to supplement its own generation of
hydroelectric power to meet municipal and contractual
1 Ms. Park advises that "power for resale" includes power Hetch Hetchy purchases to supply
electricity to all of Hetch Hetchy's customers, including City departments and tenants on City-owned
land, as well as to other retail and wholesale customers. Such customers include the Modesto and
Turlock Irrigation Districts.
BOARD OF SUPERVISORS
BUDGET ANALYST
21
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
obligations. A shortage this year in both natural gas and
electricity supplies, combined with California's
deregulation of the power industry, have led to steep
increases in the cost of purchasing such electric power.
Ms. Laurie Park, Acting General Manager of Hetch
Hetchy, reports that while in the past, prices in the spot
market have ranged from $20 to $40 per Megawatt hour2,
the current price for power on the spot market is
fluctuating at around $200 to $300 per Megawatt hour.
For FY 2000-2001, Hetch Hetchy budgeted a total of
$17,600,000 for the purchase of power for resale.
According to Ms. Park, as of February 19, 2001, Hetch
Hetchy had expended a total of $36,010,488, which is
$18,410,488, or 104.6 percent, more that the amount of
$17,600,000 budgeted for the entire fiscal year. Based on
projections provided by Ms. Park, Hetch Hetchy will
expend an estimated total of $41,218,088 to purchase
power for resale FY 2000-2001, which will be $23,618,088,
or 134.2 percent, more than the original budgeted amount
of $17,600,000, as shown in Attachment I, provided by
Hetch Hetchy. However, as explained in Comment No. 5,
Hetch Hetchy is requesting $25,400,000, or $1,781,912
more than the projected year-end deficit of $23,618,088.
Comments: 1. The FY 2000-2001 budget, as adopted by the Board of
Supervisors, is based on total General Fund revenue
sources that include a transfer of Hetch Hetchy surplus
revenues to the General Fund in the amount of
$29,850,000. Mr. Carlos Jacobo, Budget Director of the
PUC, does not anticipate that the proposed supplemental
appropriation will cause a reduction in Hetch Hetchy's FY
2000-2001 transfer to the General Fund, as previously
approved by the Board of Supervisors. According to Mr.
Jacobo, Hetch Hetchy currently has an unappropiated
fund balance totaling approximately $11,000,000, which
would be reduced by $6,200,000 to approximately
$4,800,000 if the proposed supplemental appropriation
were to be approved.
2 A Megawatt hour is equivalent to 1,000 kilowatt hours, or enough power to provide electricity to
one thousand average homes for a period of one hour, according to Ms. Park.
BOARD OF SUPERVISORS
BUDGET ANALYST
99
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
2. As shown in the table above, Hetch Hetchy will use the
following four sources to fund the proposed $25,400,000
supplemental appropriation:
(a) Revenue from Electricity Sales (810,800.000): Ms.
Park advises that Hetch Hetchy generated this
$10,800,000 in revenues by selling electricity beyond
the $81,180,000 that Hetch Hetchy had anticipated
and budgeted for FY 2000-2001, as shown in
Attachment II. Hetch Hetchy projects year-end
revenues of $95,278,686 from the sale of electricity,
which is $14,098,686 more than the $81,180,000 in
revenues budgeted for FY 2000-2001. Ms. Park
advises that Hetch Hetchy is requesting that only
$10,800,000 of the $14,098,686 in projected surplus
to be used to fund the subject request since the year-
end revenue projections may change depending on
_nn_ra-tes— to^be^el^-by^the^^alifQr-m^
Commission.
(b) De-obligated Capital Projects ($7.400.000):
According to Ms. Park, Hetch Hetchy reviewed all of
its capital projects and determined that the proposed
New Moccasin Penstock Project, originally planned
to begin in the Spring of 2001, could be deferred for
one to two years without risk to public health or
safety, as stated in Attachment III. According to Ms.
Park, the new Moccasin Penstock Project would
expand the system of pipes, increasing the Moccasin
Powerhouse's ability to generate electricity and
allowing Hetch Hetchy to repair existing pipelines.
Ms. Park reports that the entire $7,400,000 balance
in the New Moccasin Penstock Project would be used
to help fund the proposed supplemental
appropriation. According to Ms. Park, Hetch Hetchy
has completed the design phase of the project and
will postpone putting the construction contract out
to bid until Fiscal Year 2002-2003. Ms. Park advises
that Hetch Hetchy will fund construction of the
project with a future appropriation, subject to
approval by the Board of Supervisors. Ms. Park
estimates that the New Moccasin Penstock Project
will now be rebudgeted in Fiscal Year 2002-2003 and
completed in Fiscal Year 2003-2004.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
(c) Unappropiated Fund Balance ($6.200.000'): As stated
in Comment No. 1 above, the proposed supplemental
appropriation would reduce Hetch Hetchy's
unappropriated fund balance by $6,200,000, from
$11,000,000 to $4,800,000.
(d) Savings in Permanent Salaries ($1.000,000):
According to Ms. Park, Hetch Hetchy has realized
approximately $1,000,000 in salary savings due to
approximately 30 vacancies during FY 2000-2001.
Ms. Park advises that many of these vacancies result
from Hetch Hetchy's recent reorganization and, now
that the Department of Human Resources has
approved a civil service reclassification study also
related to the reorganization in the department,
Hetch Hetchy plans to fill 12 of such vacancies
within four to six weeks, as stated in Attachment III.
3. As explained in Attachment III, provided by Hetch
Hetchy, power prices are expected to remain at very high
levels through February of 2001, declining in March
through May (as snow packs melt and allow greater
production of hydroelectric power) and increasing to high
levels again during June through October of 2001. Since
July 1, 2000, the beginning of FY 2000-2001, the average
monthly price per Megawatt hour for power has been
$164.04, according to Ms. Park and as shown in
Attachment rV, provided by Hetch Hetchy. According to
Ms. Park, Hetch Hetchy projects the average price per
Megawatt hour for the remaining four months of the fiscal
year (March through June) to range from an estimated
$150 to $250 per Megawatt hour.
4. The City is currently under long-term agreements with
the Modesto and Turlock Irrigation Districts ("the
Districts") for the sale of Hetch Hetchy hydroelectric
power. These Long-Term Power Sales Agreements began
on April 1, 1988 and will expire on June 30, 2015, for a
term of 27 years and three months each. Under these
Long-Term Power Sales Agreements, the City has a firm
obligation to sell to the Districts sufficient energy to meet
the Districts' demand for "Class 1" and "Class 3" power,
determined by a formula defined in the agreement and
explained in Attachment III to this report, provided by
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
Hetch Hetchy. Under these Long-Term Power Sales
Agreements, the amount of power that the City must
provide to the Districts is based on a 5-year irrevocable
forecast, so that in the year 2001, the City projects the
amount of power it will be required to provide to the
Districts in 2005. Further, under these Long-Term Power
Sales Agreements, the Modesto and Turlock Irrigation
Districts have the right of first refusal for purchasing
Hetch Hetchy's Excess Energy from hydroelectric
generation (defined in table below). Under the Power
Sales Agreement, the City must charge the Districts the
following rates:
Types of Power Sold to Modesto and Turlock
Irrigation Districts by Hetch Hetchy.
Current Average
Rate per
Megawatt Hour
Charged to
Districts
in FY 2000-01
Class 1 Power:
Mainly used for actual municipal public purposes and
irrigation pumping for agriculture
$15.87
Class 3 Power:
Remainder of "firm" energy sold under the Agreements
$34.10
Excess Energv
Excess Energy is energy that Hetch Hetchy generates
due to the need to move water from reservoirs but does
not need for its own use. Under the Long-Term Power
Sales Agreements, the Modesto and Turlock Irrigation
Districts have the first right of refusal for purchasing
such Excess Energy from hydroelectric generation,
according to Ms. Park
$22.44
In order for the City to meet the demand for power in both
the City and in the Modesto and Turlock Irrigation
Districts, Hetch Hetchy is required to purchase power,
especially during summer and fall when Hetch Hetchy's
generation of hydroelectric power is limited by the
amount of water delivered to the City and the Bay Area.
The Budget Analyst notes that while Hetch Hetchy has
BOARD OF SUPERVISORS
BUDGET ANALYST
25
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
paid an average of $164.04 per Megawatt hour per month
since July 1, 2001 to purchase power, the department has
been required by the Power Sales Agreements to continue
selling power to the Modesto and Turlock Irrigation
Districts at a loss.
As shown in the table above, whenever Hetch Hetchy
must purchase power at a current cost of $200 to $300 per
Megawatt hour, this results in a loss to Hetch Hetchy
ranging between approximately $184.13 and $284.13 per
Megawatt hour when such power is sold to the Modesto
and Turlock Irrigation Districts for Class 1 power and
between approximately $165.90 and $265.90 per
Megawatt hour when sold to the Districts for Class 3
power.
According to Ms. Park, from the period between July 1,
2000 and December 31, 2000, Hetch Hetchy sold a total of
471,420 Megawatt hours of electricity to the Modesto and
Turlock Irrigation Districts, which includes: (a) 169,272
Megawatt hours of Class 1 Power, (b) 280,268 Megawatt
hours of Class 3 Power, and (c) 21,880 Megawatt hours in
Excess Energy. Ms. Park advises that Hetch Hetchy
received total revenues of $12,570,829 from the Modesto
and Turlock Irrigation Districts for such power sales.
Based on data provided by Hetch Hetchy, the Budget
Analyst estimates that, for the six months from July 1,
2000 through December 31, 2000, Hetch Hetchy
purchased a total of 143,836 Megawatt hours for resale to
the Modesto and Turlock Irrigation Districts at a total
cost of $21,576,318 and an average cost of $150 per
Megawatt hour. As a result, as of December 31, 2000,
Hetch Hetchy has lost an estimated total of $17,711,197
resulting from its obligation to sell hydroelectric power to
the Modesto and Turlock Irrigation Districts. This
estimated loss of $17,711,197 is the difference between
the total cost of $21,576,318 to purchase power less
approximately $3,865,120 paid to Hetch Hetchy by the
Modesto and Turlock Irrigation Districts for such power.
5. As stated previously, Hetch Hetchy projects that it will
expend an estimated total of $41,218,088 to purchase
power for resale in FY 2000-2001, which will be
BOARD OF SUPERVISORS
BUDGET, ANALYST
26
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
$23,618,088, or 134.2 percent, more than the original
budgeted amount of $17,600,000, as shown in Attachment
1. provided by Hetch Hetchy. However, the proposed
supplemental appropriation is for $25,400,000, or
$1,781,912 more than the projected deficit of $23,618,088.
Ms. Park advises that this difference of $1,781,912 will
allow Hetch Hetchy to adjust to probable changes in the
projected year-end deficit of $23,618,088, due to the
volatility of electricity prices. Any unexpended portion of
the proposed supplemental appropriation will return to
Hetch Hetchy's Unappropriated Fund Balance at the end
of FY 2000-2001.
Recommendations: 1. Amend the proposed $25,400,000 supplemental
appropriation by reserving $1,781,912, pending an
updated projection of Hetch Hetchy's total deficit for the
purchase of electrical power for resale in Fiscal Year
2000-2001.T: - - : - -
2. Request that Hetch Hetchy provide a report to the
Finance Committee on the status of Hetch Hetchy's
projected deficit for the purchase of electrical power for
resale by May 1, 2001.
3. Approve the proposed ordinance, as amended.
BOARD OF SUPERVISORS
BUDGET ANALYST
97
Attachment I
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29
«rPO
HETCH HETCHY
Water a Power
WlLUE L_ BROWN, JR.
Mayor
president
Victor G. Makras
Vice President
Ann mou-er Caen
E. Dennis Normandy
Frank l_ Cook
Ashok Kumar Bhatt
John p. Mullane, Jr.
General manager
Attachment III
Page 1 of 7
TO:
MEMORANDUM
Board of Supervisors Budget Analyst
Attention: Emilie Neumann
FROM: Hetch Hetchy Water & Power - Laurie Park
SUBJECT: FYOO/01 Supplemental Appropriation for $25.4 Million
DATE:
February 19, 2001
The purpose of this memo is to respond to questions raised by the Board of
Supervisors Budget Analyst about Hetch Hetchy 's request for a supplemental
appropriation in the amount of $25.4 million.
For clarification, Hetch Hetchy requested and the SFPUC approved a request for an
$18 million supplemental at its meeting on January 9, 2001. Subsequent to that
date, continued dry hydrological conditions reduced Hetch Hetchy's ability to
generate. In addition, very cool temperatures and persistent gas and electric supply
shortages kept power prices higher than anticipated. As a result, Hetch Hetchy will
exceed the originally requested $18 million supplemental appropriation. We believe
that increasing the amount by an additional $7.4 million, to a total of $25.4 million,
is reasonable at this time. However, if hydrological conditions do not rebound to
close to "normal" levels, we may need to seek a further supplemental appropriation
for the remainder of this fiscal year.
"Power for Resale" Expenditures
Object 033 "Power for Resale" was budgeted at $35,271,210 during FYOO/01.
This amount was comprised of two principal components: $21,631,210 for "03311
Power for Resale" and $13,640,000 for "03321 Power Transmission &
Distribution" .
Subobject "03311 Power for Resale" is comprised of wholesale power purchases
(budgeted at $17.6 million) and wholesale power support costs under the long term
City/PG&E Interconnection Agreement (budgeted at $4 million). Subobject "03321
Power Transmission & Distribution" is comprised of charges by PG&E and others
for transport of power.
:, ;\^ ;,.:•. -rrxrr::
30
Attachment m
Page 2 of 7
The spreadsheet provided as Attachment 1 to the Budget Analyst report indicates the
breakdown of budgeted vs. actual costs by subobject and principal category of expense.
As of February 19' , Hetch Hetchy has overspent its Power for Resale budget by
$18,361,988. As of this date, wholesale power expenditures (including transport, aka
"transmission and distribution") are projected at 556,687,586 through June 30, 2001.
This is not the highest amount ever paid for wholesale power and transport services. In
fiscal year 1986, the cost of these services totaled S58.5 million.
Over the past 10 years, Hetch Hetchy's "Power for Resale" budget varied from a low of
$17.7 million to a high of $39.5 million. Most of these variances were attributable to
fluctuations in annual hydrology. The 517.7 million budget occurred in a very wet year
(170% of "average") and the $39.5 million cost occurred during a drought (45% of
"average").
This year, the very high cost of "Power for Resale" is directly attributable to the
California power crisis and continued shortages of both natural gas and electricity.
Attachment IV to the Budget Analyst report illustrates that over the past 7 years, Hetch
Hetchy's annual power purchase costs ranged from a low of $3.7 million to a high of
$15.8 million, with average prices ranging from $17.56 to $35.14 per megawatt hour.
This year's power purchases have already exceeded $36 million at an average cost of
$164.04/MWhr. Futures prices for March and April are fluctuating in the 5220-5250
range.
Districts' Contracts
The "Long Term Power Sales Agreement between the City and County of San Francisco
and the [Modesto/Turlock] Irrigation District(s)" were executed in 1988 and expire on
July 1, 2015, "unless it is terminated earlier by the agreement of the Parties or by either
Party pursuant to this Section 24 or Section 25."
These agreements require that Hetch Hetchy provide, and the Districts take, electricity
generated by the Hetch Hetchy Project between the "Project Dependable Capacity"
("PDC"; presently 260 MW) as defined in these agreements and the amount of power
needed by Hetch Hetchy to meet "City Municipal Demand". The Districts must take that
power at a 65% load factor (i.e., Districts' Energy = Demand x Hours per Year x 65%).
The amount of power that Hetch Hetchy must provide to the Districts is based on a 5 year
irrevocable forecast. In other words, the City projects in the year 2001 the amount of
City Municipal Demand expected in the year 2005. This projection is binding in terms of
how much power the City must provide and the Districts must take in the year 2005. The
amount of power that the City must provide and the Districts must take from the years
2001 through 2004 have already been determined in prior years through the same 5Ih year
forecast methodology. The amount of City Municipal Demand forecasted for calendar
year 2001 is 128,045 kW. Therefore, the amount of energy that the City must provide to
the Districts is 751 million kilowatt hours [(260,000 kW- 128,045 kW) x 8760 hours per
year x 65%].
31
Attachment HI
Page 3 of 7
There are three classes of sales under these Agreements:
(1) Sec. 4.15 Class 1 Power: That Power which, pursuant to Section 9(1) of the Raker
Act, is sold at cost by City to [Modesto/Turlock].
(2) Sec. 4.16 Class 3 Power: That portion of Districts' Power purchased by
[Modesto/Turlock] from City that is not Class 1 Power.
(3) Sec. 4.22 Districts' Excess Energy: The amount of Hetch Hetchy Excess Energy, in
kilowatthours, available for use by Districts, up to ninety-eight (98) percent of the
greater of (1) the difference between Hetch Hetchy Excess Energy and Airport
Tenants' energy requirements or (ii) one-half of Hetch Hetchy Excess Energy, as
more fully described in Section 7.4.
Class 1 and Class 3 power are considered "firm"; i.e., the City has an obligation to
provide that amount of power under most circumstances. Exceptions are defined in Sec.
21 "Uncontrollable Forces". Excess energy is considered "non-firm"; i.e., the City is
only obligated to offer this energy to the Districts if and when there is sufficient water to
generate and Hetch Hetchy generation exceeds PDC.
The amount of power that the Districts take for Class 1 vs. Class 3 are based upon actual
Class 1 usage. "Class 1" power may only be used by the Districts for certain purposes
defined in the 1913 Raker Act, i.e., agricultural pumping and "actual municipal public
purposes" [HR7207 Sec. 9(1)]. Any power taken by the Districts under the PDC is
allocated first to qualified Class 1 uses. The balance of "firm" energy that the Districts
must take is considered "Class 3".
The rates at which Hetch Hetchy must sell power to the Districts is determined by the
Agreements. In accordance with the Raker Act, "Class 1" power must be sold "at cost".
Class 3 rates are based upon a rate methodology described in the Agreement. The rate
methodology is tied to PG&E's "Electric System Average Energy Costs" as reported
annually in their SEC Form 10-K reports.
The current rates are as follows:
Rate basis
Class 1
Class 3
Excess Energy
Demand
S/kW-month
S4.74
$5.53
Energy
$/kilowatt hour
$0.00588
$0.02244
S0.02244
Blended (avg)
S/kilowatt hour
$0.01587
$0.03410
$0.02244
Assuming an annual distribution of 45% Class 1 and 55% Class 3 under PDC, the
average rate earned on firm sales to the Districts is approximately $0,026 per kilowatt
hour ($26 per megawatt hour).
32
Attachment HE
Page 4 of 7
Total Revenues from Sales of Power
In the FY00/01 budget, we estimated power sales of $81,180,000. Attachment II of the
Budget Analyst report illustrates the breakdown of budgeted vs. actual to-date and
projected fiscal year sales by customer segment.
The principal unknown at this time is the amount of energy that will be available for sale
during the spring snowmelt as excess energy. Spring excess energy must be offered first
to the Districts, and then to other municipal utilities and public power agencies. In the
event that Hetch Hetchy cannot find sufficient qualified wholesale buyers for its excess
energy during the spring snowmelt, PG&E "banks" the power for us and allows us to
return it to ourselves during "like time periods" (i.e., if we deposit the power during off-
peak periods, we take it back during off-peak periods; etc.).
To-date, we have had $8.5 million in unbudgeted sales, as follows:
ISO Demand Reduction Program $ 2,000,000m
Wholesale Sales (Summer 2000) $ 4,500,000[2]
— —Emergency Sales to ISO $ 2.000.000[31"r ~ —
Total Unbudgeted Sales: $ 8.500.000
Notes:
[1] Hetch Hetchy coordinated the City's participation in the ISO's Demand Reduction Program
during Summer 2000. Hetch Hetchy 's share of the revenues earned under this program was
S2 million.
[2] In addition, Hetch Hetchy sold S4.5 million of power during summer to municipal utilities
and other public agencies, including the Districts. Excess power was available during this
period because Hetch Hetchy needed to reduce the reservoir elevation at Cherry (Lake Lloyd)
in order to drain the Cherry-Eleanor tunnel for maintenance and repair work scheduled during
Fall 2000.
[3] Further, the ISO has called upon Hetch Hetchy throughout the past year for emergency power
support needed to keep power flowing on the California electric grid. To-date, sales of such
emergency power to the ISO were $2 million. We have provided some small quantities of
emergency power to the ISO since January 1, 2001; however we do not yet know how much
the ISO will be paying for that power so it is not included in these projections.
Attachment II of the Budget Analyst report projects a total of $14 million in unbudgeted
revenues during FY00/01. Of this amount, $8.5 million has already been earned and $2.3
million is projected to be earned as a result of the temporary (3 month) $0.01/kWhr
surcharge authorized by the CPUC to be charged to PG&E customers effective January 1,
2001.' The remaining $3.2 million is attributable to a combination of increased loads and
a presumption that the PG&E surcharge will remain in effect through June 30, 2001 .
1 Under existing PUC rate policy which was ratified by the Board of Supervisors, certain classes of
Hetch Hetchy customers are charged rates equivalent to PG&E retail. Specifically, Enterprise Fund
33
Attachment III
Page 5 of 7
For purposes of this supplemental, we have assumed incremental revenues of $10.8
million ($8.5 million already earned, plus $2.3 million from rate increases) will be
available. To the extent that actual revenues may exceed this amount, the amount of
funds appropriated from Hetch Hetchy's Fund Balance will be reduced accordingly.
Wholesale Power Market Outlook
Based on recent power price forecasts issued by PIRA Energy Group, present
expectations are that power prices will remain at very high levels through February, but
are expected to decline in March through May (spring snowmelt). Thereafter, presuming
we see a warm summer similar to Summer 2000, prices are expected to reach or exceed
levels experienced during June through October 2000. PIRA believes that continued
shortages of natural gas supplies will keep prices higher than "normal" (although not at
the extraordinarily high levels experienced this winter) until gas production catches up
with demand. PIRA experts believe that may occur within 12-18 months.
Presently, we are struggling to prepare an estimate of power purchase costs for FY01/02.
^VTe believe that costs" maynmgeTrbm $40 1 o $80 million. The actual level of
expenditures experienced will depend upon a number of factors, the most significant of
which are:
• Hydrology. As a 100% hydroelectric utility, Hetch Hetchy's power purchase
budget is significantly impacted by variations in hydrology. This year, for
example, we are experiencing dry conditions. To-date, we have received about
75% of the precipitation normally received by this time. This year's final power
purchase expenditures will depend in large part upon whether or not we approach
"normal" hydrological conditions within the next 4-6 weeks.
Hetch Hetchy's actual electric production varies widely with hydrology - from
about 1.2 to 2.2 billion kWhrs per year. Since we cannot accurately predict
hydrology, we assume "normal" (historic average) hydrological conditions at the
beginning of every budget year. In other words, our FY01/02 budget assumes full
reservoirs on July 1st and "normal" hydrology thereafter.
• Multi-year power purchase. The daily California wholesale power market is
presently very volatile. Volatility can be significantly moderated by extending the
term of a power purchase commitment beyond the period of resource shortages.
Specifically, the market is presently quoting lowest prices for purchase
commitments of 5-10 years. Since the market expects electric shortages to
continue for up to 3 years, Hetch Hetchy is issuing a request for bids for a 3, 5, 7
and 10 year purchase of power.
and Retail customers are charged PG&E retail rates.
34
Attachment EI
Page 6 of 7
In addition, Hetch Hetchy constantly seeks improvements to its net revenues through a
combination of reduced costs of service and new sources of revenues. These efforts will
continue diligently throughout the next and future years. However, since results are
speculative at present, we would not recognize the impact of any net revenue
improvements in Hetch Hetchy's budget until such time as an opportunity has progressed
to a point where its successful implementation seems fairly certain.
Salary Savings
In Hetch Hetchy's request for supplemental appropriation, we indicated an expectation of
approximately $1 million in salary savings during FY00/01. As you know, Hetch Hetchy
commenced a reorganization during calendar year 2000. That reorganization is still in
progress. A major part of that reorganization involved significantly upgrading the skills
of existing and new Hetch Hetchy professional/technical staff such that they could help
Hetch Hetchy aggressively pursue new business opportunities and restore the levels of
economic benefits Hetch Hetchy produced prior to the electric restructure. However, it
took a bit longer than we expected to develop and implement the class consolidation
strategy needed to implement the reorganization. As a result, we have a significant
number ot vacancies which produced the $ 1 million in projected salaries savings.
On November 13, 2000, DHR approved the consolidation of six classifications in the
Energy Conservation and the Water and Power Resource Planning series into two
professional/technical classifications: the 5601 Utility Analyst and the 5602 Utility
Specialist. The purpose of this class consolidation was to significantly streamline the
process of recruiting and hiring a wide range of analytical and project development staff
- from power marketers and schedulers, to hydrologists, economists, environmental
experts, energy efficiency experts, and renewable energy developers. Recruitment began
on November 22, 2000. We are presently in the process of reviewing the applicant pool
and making offers. We expect to fill 12 professional7technical vacancies within the next
4-6 weeks.
These positions are of critical importance to Hetch Hetchy's mission and are the
foundation of Hetch Hetchy's business analysis and project development. Now that the
class consolidation has been approved, we intend to fill all of these vacancies
expeditiously. Five of these positions will implement the aggressive energy conservation
and efficiency projects that are needed to implement the Mayor's directive of a 5%
energy savings by Summer 2001 and a 10% energy saving by Summer 2002. Three of
these positions will develop and implement renewable energy and distributed generation
projects, including solar, wind, fuel cells and natural gas cogeneration. Two positions will
serve as the City's experts in matters concerning "siting" of power generation and
transmission facilities, with a goal of minimizing air emissions and other environmental
impacts and attaining the public policy goal of "environmental justice." The remaining
two positions are needed to support Hetchy Hetchy's wholesale water and power
operations, especially in power marketing and water supply planning.
35
Attachment HI
Page 7 of 7
The projected $1 million in salary savings assumes that we will fill all of these vacancies
within the next 4-6 weeks.
Capital Project Deobligations
Hetch Hetchy has critically reviewed its current capital projects and determined that the
proposed New Moccasin Penstock Project can be deferred for 1-2 years without risk to
public health and safety. We are presently completing engineering design on this project
but intend to defer putting the project out to bid until next year. In the meantime, we
have set aside the balance of $7.4 million remaining in the New Moccasin Penstock
Project in case it is needed to meet additional unbudgeted power purchases.
There are two existing penstocks at Moccasin Powerhouse. It is our intent to build the
new Moccasin Penstock before taking the existing penstocks out of service for
maintenance and repairs. In this manner, the reliability of this segment of the City's
water delivery system will be maintained.
The repair of the existing penstocks has been deferred until FY02/03. Therefore, the new
Moccasin Penstock can also be deferred until that time. It is our intent to request
refunding of this project in FY02/03. When both existing penstocks are repaired and the
new penstock placed in service, generation at Moccasin Powerhouse will increase by
approximately 3%, or 12,000 MWhrs per year.
Distribution
Mayor's Budget Office - James Maclachlan
Controller's Office - Matthew Hymel
PUC General Manager - John P. Mullane, Jr.
PUC Assistant General Managers - Larry Klein, Bill Berry
PUC Finance - Kingsley Okereke, Carlos Jacobo
HHWP - Senior Management Staff
Records
36
Attachment IV
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37
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
Item 5 - File 01-0145
Department:
Item:
Location:
Sheriffs Department
Treasure Island Development Authority
Resolution approving a sublease, retroactive to July 1,
2000, between the City and the Treasure Island
Development Authority for property on Treasure Island
commonly known as the Treasure Island Naval Brig, or
jail, (Buildings 670 & 671), located at the Corner of 13th
and M Streets on Treasure Island, for an annual rent not
to exceed $250,000 per year.
Treasure Island Brig facility (Buildings 670 & 671),
located at the Corner of 13th and M Streets
Lessor:
Lessee:
Sublessee:
Term of Sublease:
Purpose of Sublease: Under the proposed sublease, the Sheriffs Department
would— use— the-Treasure— I-s-1-a-nd— Naval— Brig for-training
and, in the case of an emergency, overflow jail facilities.
U.S. Navy (Master Lease)
Treasure Island Development Authority
Sheriffs Department
Commencing retroactively to July 1, 2000 and
terminating on May 15, 2005, for a sublease term of four
years and eleven months (See Comment No. 1). Under the
proposed sublease, the Sheriffs Department would have
three options for using the Naval Brig ("the Brig") facility:
1) The Sheriffs Department would be authorized to use
the Brig facility for a total of 90 days per fiscal year for
Deputy Sheriff training purposes;
2) Additionally, upon written notice of an emergency to
the Treasure Island Development Authority, the
Sheriffs Department would be able to use the Brig
facility during an emergency to house approximately
100 nonviolent prisoners during the duration of the
emergency.1 Under the proposed sublease, the Sheriffs
1 The proposed lease defines "emergency" as "...any situation or condition in the City and
County of San Francisco which creates a widespread threat to life, property, or the welfare of
the City and County of San Francisco or its citizens as determined by the Mayor."
BOARD OF SUPERVISORS
BUDGET ANALYST
38
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
Right of Renewal:
Department would not be charged additional rent by
the Treasure Island Development Authority for such
emergency use of the Brig facility;
3) The Sheriffs Department may request permission
from the Treasure Island Development Authority to
use the Brig facility during non-emergencies to: (a)
temporarily house approximately 100 nonviolent
prisoners, or (b) use the facility for any use, such as
longer-term housing of inmates, approved in writing
by the Executive Director of the Treasure Island
Development Authority. The Sheriffs Department
would be required to make such requests at least 30
days prior to the date the Sheriffs Department would
like to begin using the facility. According to Mr.
Stephen Proud of the Treasure Island Development
Authority, before granting permission for such non-
emergency use of the Brig facility, the Treasure Island
Development Authority would have the option to
negotiate an amended lease including an increased
rent with the Sheriffs Department if the Sheriffs
Department proposed using the facility for an
extended period of time. Such a lease amendment and
any related additional funds would be subject to
approval by the Board of Supervisors. The subject
sublease states that the Treasure Island Development
Authority "...shall not unreasonably withhold
permission to use the Premises during such non-
emergency and/or non-Permitted Use Period."
None
Number of
Square Feet:
Approximately 2.25 acres (98,010 square feet), including
approximately 28,163 square feet for the Brig building.
The balance of 69,847 square feet (98,010 less 28,163)
would be used by the Sheriffs Department for secured
prisoner outdoor recreation and parking.
BOARD OF SUPERVISORS
BUDGET ANALYST
39
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
Rent and Other Costs
Payable to the Treasure
Island Authority by the
Sheriffs Department: $250,000 per year, paid annually in advance of July 1st for
each, fiscal year during the four-year and eleven-month
term of the lease. In addition to the $250,000 annual rent,
the City will be required to pay to Treasure Island
Development Authority additional fees of $19,620 per
year, including:
(1) The City will pay for the Common Area Maintenance
Charge (Navy CAM Charge) fee charged by the Navy
to the Treasure Island Development Authority under
the Master Lease. Under the proposed sublease, the
Sheriffs Department would be required to pay $900
per month, or $10,800 annually, to the Treasure
Island Development Authority for the CAM Charge.2
(2) The City will pay to the Treasure Island Development"
Authority a monthly Landscaping Charge of $735, for
a total annual charge of $8,820.
Therefore, the total annual charges to be paid by the
Sheriffs Department to the Treasure Island Development
Authority will be $269,620 ($250,000 in rent plus $19,620
in additional fees).
Ms. Jean Mariani of the Sheriffs Department advises
that the Sheriffs Department will make Navy CAM and
Landscaping payments monthly to the Treasure Island
Development Authority, for the entire term of the
sublease, whether the Sheriffs Department is using the
facility or not. The proposed sublease contains no
provisions for annual adjustments for the rent, the CAM
or the Landscaping Charge.
2 According to Mr. Stephen Proud of the Treasure Island Development Authority, the CAM is based
on SO. 025 per square foot per month for the 28,163 interior space of the Brig building and SO. 003 per
square foot per month for the 69,847 exterior space, totaling $913.62 per month. However, the
proposed sublease states that the Navy CAM charge is not to exceed $900 per month. Therefore the
Sheriffs Department would be required to pay to the Treasure Island Development Authority $900
per month, or $10,800 annually.
BOARD OF SUPERVISORS
BUDGET ANALYST
An
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
Source of Funds:
Ms. Mariani advises that the Sheriffs Department's
Fiscal Year 2000-2001 General Fund budget includes
$269,620 to fund the $250,000 in rent and $19,620 in
additional fees discussed above, which the Sheriffs
Department must pay to the Treasure Island
Development Authority for Fiscal Year 2000-2001 (See
Comment No. 4).
Utilities and
Maintenance:
Description:
Under the proposed sublease, the City would pay for all
maintenance and utility costs at the Brig facility. Mr.
Stephen Proud of the Treasure Island Development
Authority advises that the City would be required to pay
these costs, estimated at $92,000 annually, year round for
the entire four years and eleven months of the sublease
term. (See Comment No. 4 for all estimated costs.)
lay 2, 1997, the Board of Supervisors authorized the
creation of the Treasure Island Development Authority as
a nonprofit public benefit corporation to act as a single
entity focused on the planning, redevelopment,
reconstruction, rehabilitation, reuse and conversion of
former United States Naval Station Treasure Island
(Resolution No. 244-97-3). On October 12, 1997, the
California Legislature approved the Treasure Island
Conversion Act of 1997, which designated the Authority
as a trustee of the State Tidelands Trust and as a
redevelopment agency with jurisdiction over Treasure
Island and Yerba Buena Island. The Treasure Island
Development Authority currently leases from the Navy
the Treasure Island Brig facility, discussed below, under a
five-year Master Lease, which began on April 5, 1999 and
will terminate on April 4, 2004. (See Comment No. 2
below).
The proposed resolution would authorize a sublease
between the City and the Treasure Island Development
Authority for the Sheriffs Department to use the Brig on
Treasure Island. The Brig is a two-story, 28,163 square
foot jail facility built by the Federal government in 1992.
As described above, under the proposed sublease the
Sheriffs Department would have authority to use the
Brig facility, for: (1) 90 days of officer training; (2) to
temporarily house prisoners during an emergency; and (3)
to temporarily house prisoners during non-emergency
BOARD OF SUPERVISORS
BUDGET ANALYST
A1
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
periods, or for any other use, as approved by the
Executive Director of the Treasure Island Development
Authority. According to Mr. Proud, before granting
permission for such non-emergency use of the Brig
facility, the Treasure Island Development Authority
would have the option to negotiate an amended lease and
increased rent with the Sheriffs Department if the
Sheriffs Department proposed using the facility for an
extended period of time, which would be subject to
approval by the Board of Supervisors.
According to Ms. Mariani, the Sheriffs Department
currently plans to use the Brig facility as a training
facility and as a temporary emergency overflow jail. Ms.
Mariani reports that the training to take place at the Brig
would consist of an annual Advanced Officer course for all
sworn employees working in City and County jails and a
-4our^to-seyen-week- intKdu^ory^^our^e--fbr— new-ly-hir&d-
officers. According to Ms. Mariani, the Sheriffs
Department would use the Brig facility as a temporary
overflow jail for emergencies such as large protests that
result in mass arrests. Furthermore, Ms. Mariani advises
that the Sheriffs Department does not have alternative
vacant space for overflow housing of prisoners. In the
past, when the Sheriffs Department has faced jail
overcrowding, the Sheriffs Department has rented jail
space from other jurisdictions, and when such space is not
available, the Sheriffs Department has been forced to
release prisoners from custody early, according to Ms.
Mariani and as stated in Attachment I, provided by the
Sheriffs Department.
Tenant
Improvements: The Fiscal Year 1997-98 budget, as finally approved by
the Board of Supervisors, included a $2,100,000 General
Fund reserve for the Treasure Island Brig project. The
Sheriffs Department planned a project that would convert
the Treasure Island Brig facility to a permanent jail
facility that would house 140 prisoners in order to relieve
jail overcrowding at County Jail No. 3 in San Bruno. Ms.
Mariani advises that the Sheriffs Department was never
able to operate the Treasure Island Brig as a full-time jail
due to insufficient staffing (discussed further in Comment
No. 6 below). Ms. Mariani advises that since 1997, the
Sheriffs Department has expended a total of $1,099,409
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
in capital improvements, listed as construction costs in
Attachment II, provided by the Sheriffs Department. In
addition, Attachment III provided by the Sheriffs
Department contains an explanation of these projects and
the amount originally budgeted for these projects, totaling
$1,380,000 or $280,591 less than the actual expenditures
of $1,099,409 due to savings realized during construction,
according to Ms. Mariani.
Comments: 1. According to Ms. Mariani, the proposed sublease will
commence retroactively because the Sheriffs Department
has been using the Brig since July 1, 2000 for training
purposes. Ms. Mariani advises that the Sheriffs
Department did not first obtain Board of Supervisors
approval before using the Treasure Island Brig facility
because the Sheriffs Department and the Treasure Island
Development Authority were negotiating to finalize the
sublease documents. ■ :
2. As noted previously, the Treasure Island Development
Authority currently leases from the Navy the Treasure
Island Brig facility under a five-year Master Lease, which
began on April 5, 1999 and will terminate on April 4,
2004. The Budget Analyst notes that the term for the
proposed sublease between the Sheriffs Department and
the Treasure Island Development Authority would expire
on May 15, 2005, more than one year past the expiration
of the Master Lease with the Navy. Mr. Proud advises
that the Treasure Island Development Authority expects
to complete the transfer of ownership of the Naval Station
on Treasure Island from the Navy to the Treasure Island
Development Authority before the Master Lease the
Treasure Island Development Authority holds with the
Navy expires. According to Mr. Proud, in the event that
such a transfer does not take place before the Master
Lease expires, the Treasure Island Development
Authority would seek an extension of the Master Lease
with the Navy.
3. Ms. Mariani reports that, since 1997, the Sheriffs
Department has expended a total of $2,335,311 at the
Treasure Island Brig, including a total of $1,099,409 in
construction costs and $1,235,902 in operational costs, as
outlined in Attachment II, provided by the Sheriffs
Department. Ms. Mariani advises that the total
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
$1,235,902 in operating costs, including the limited
staffing, utilities and supplies required to support the
construction improvements taking place. The total
expenditure of $2,335,311 also includes $44,248 in
operating costs since July 1, 2000 for Fiscal Year 2000-
2001. According to Ms. Mariani, upon approval of the
proposed sublease, the Sheriffs Department would also
pay to the Treasure Island Development Authority the
entire $250,000 in rent for FY 2000-2001, plus the $900
monthly Navy CAM fees and the $735 monthly
Landscaping fees, discussed above, retroactive to July 1,
2000, for a approximate total one-time payment of
$263,080 ($250,000 rent plus $7,200 for eight months of
Navy CAM fees and $5,880 for eight months of
Landscaping fees, for July of 2000 through February of
2001). Ms. Mariani advises that the Sheriffs Department
has a total of $269,620 in the department's Fiscal Year
2000-2001 budget to cover this one-time payment of
$263,080, as well as the $3,600 in Navy CAM fees and
$2,940 for the remaining four months of Fiscal year 2000-
2001 (March through June of 2001).
4. As shown in Attachment II, provided by the Sheriffs
Department, annual cost to the Sheriffs Department for
the proposed lease and operation of the Treasure Island
Brig would be an estimated $373,620 per year. This
annual budget of $373,620 includes: (a) $269,620 in rent
and additional fees to be paid to the Treasure Island
Development Authority ($250,000 for rent plus $10,800
for the Navy CAM Charge plus $8,820 in Landscaping
fees), (b) $80,000 for utilities, (c) $12,000 for maintenance,
(d) $10,000 for contractual services, including pest control
and the purchase of bottled water, and (e) $2,000 for
materials and supplies. Ms. Mariani advises that the
Sheriffs Department would use existing staff and salaries
to provide staffing at the Brig during training periods.
According to Ms. Mariani, if the Sheriffs Department
were to house prisoners temporarily at the Brig during an
emergency, the Sheriffs Department would most likely
staff the facility using overtime funds. Depending on the
scale of the emergency, the Sheriffs Department would
either fund the additional costs of operating an emergency
overflow jail at the Brig from existing budgeted funds or
be required to request a supplemental appropriation for
such unexpected costs, according to Ms. Mariani. Ms.
BOARD OF SUPERVISORS
BUDGET ANALYST
LL
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
Mariani advises that the Sheriffs Department is unable
to provide an estimate for how much additional funding
would be needed, since such an estimate would depend
entirely on the magnitude of emergency.
5. Under the proposed sublease, the Sheriffs Department
would not have exclusive rights to the Treasure Island
Brig. The sublease states that the Treasure Island
Development Authority "...shall have the right to enter
and use the Premises at any time during the Term of this
Agreement which does not conflict with any Permitted
Use Period." Mr. Proud advises that such provision was
included to allow the Treasure Island Development
Authority access to the Treasure Island Brig, when the
Sheriffs Department was not using the facility, for
purposes such as renting the facility to film studios or
other short-term purposes.
6. In 1997 the Sheriffs Department began plans to
renovate the Treasure Island Brig facility in order to use
the Treasure Island Brig as a full-time County Jail.
Initially, the Sheriffs Department proposed housing an
average of 130 to 140 prisoners who would otherwise be
housed at Jail No. 3 in San Bruno, as part of an effort to
relocate as many inmates as possible from Jail No. 3 in
anticipation of the United States District Court
stipulating that the Sheriffs Department must reduce the
inmate population at San Bruno Jail No. 3. However, Ms.
Mariani advises that ultimately, the Sheriffs Department
was able to fulfill required improvements at the San
Bruno Jail No. 3, outlined by the United States District
Court, without relocating prisoners to the Treasure Island
Brig. As described in further detail below, the Sheriffs
Department completed capital improvements at the
Treasure Island Brig during Fiscal Years 1997-1998 and
1998-1999. However, in Fiscal Year 1999-2000, the
Sheriffs Department was unable to house inmates at the
Treasure Island Brig due to insufficient staffing.
Ms. Mariani advises that after the Sheriffs Department
completed its capital improvements to the Treasure
Island Brig, in Fiscal Year 1999-2000 the department
began using the Treasure Island Brig for training
purposes. Mr. Proud advises that the Sheriffs
Department did not pay any rent to the Treasure Island
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
Development Authority during completion of the capital
improvements at the Treasure Island Brig or during the
subsequent period of training during Fiscal Year 1999-
2000.
Fiscal Year 1997-1998
In November of 1997 the Board of Supervisors approved a
supplemental appropriation of $1,699,955 (File 101-97-20)
to fund capital improvements and operating costs at the
Treasure Island Brig, as well as to fund 24 new positions
(22 Deputy Sheriffs and two engineers), which the Board
of Supervisors also approved in 1997 to staff the Treasure
Island Brig.3 However, Ms. Mariani advises that Sheriffs
Department did not house inmates at the jail in Fiscal
Year 1997-1998 because the capital improvements
required more time than was originally expected and
were not completed until the end of Fiscal Year 1998-
1999r^te^^^r^sult7=the^Sheriff s" Department expended" a"
total of" $9327289 on ~the~Treasure Island Brig in Fiscal
Year 1997-1998, as shown in Attachment II. The total
expended amount of $932,289 included $573,560 in
capital costs and $358,729 in operating costs for the
limited staffing, utilities and supplies required to support
the construction improvements taking place, according to
Ms. Mariani. Ms. Mariani advises that the Sheriffs
Department did not fill the 24 new positions approved the
previous fiscal year and instead used the resulting salary
savings to fund deficits in other accounts in the
department's budget.
Fiscal Year 1998-1999
According to Ms. Mariani, in Fiscal Year 1998-1999, the
Sheriffs Department was appropriated $5,989,987 in its
original budget, for operating costs ($5,173,526) and
additional capital improvements ($816,461) to run a full-
time jail at the Treasure Island Brig. Ms. Mariani advises
that the budgeted amount for operating costs included
approximately $2.3 million for the salaries, benefits and
related costs of approximately 42 existing positions to be
transferred from the San Bruno Jail No. 3 to the Treasure
Island Brig. However, the Sheriffs Department again
postponed operating the Brig as a full-time jail in order to
3 The $1,699,955 appropriation was made from a $2,100,000 General Fund Reserve that was
established by the Board of Supervisors in the Fiscal Year 1997-98 budget for the Naval Brig
on Treasure Island.
BOARD OF SUPERVISORS
BUDGET ANALYST
66
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
complete additional improvements necessary for housing
inmates, according to Ms. Mariani. Ms. Mariani advises
that in Fiscal Year 1998-1999, the Sheriffs Department
expended $1,135,018 at the Treasure Island Brig, as
outlined in Attachment II, leaving a balance of $4,854,969
(original budget of $5,989,987 less expenditures of
$1,135,018). Of this balance of $4,854,969, Ms. Mariani
advises that approximately $2.3 million funded the
existing 42 employees discussed above, which remained at
the San Bruno Jail No. 3 and were never transferred to
the Treasure Island Brig as previously planned. Ms.
Mariani advises that in Fiscal Year 1998-1999, the
Sheriffs Department again postponed filling the 24 new
positions approved in Fiscal Year 1997-1998, and the
department used the resulting salary savings of
approximately $2,554,969 to fund deficits in other
accounts in the department's budget.
Fiscal Year 1999-2000
Ms. Mariani advises that for Fiscal Year 1999-2000, the
Sheriffs Department was appropriated $5,195,625 in its
original budget for expenditures at the Treasure Island
brig. However, in Fiscal Year 1999-2000, the Sheriffs
Department was unable to house inmates at the Treasure
Island Brig due to insufficient staffing, according to Ms.
Mariani. Ms. Mariani advises that a growing inmate
population in the County required the Sheriffs
Department to operate San Bruno Jail No. 3 at full
capacity, thus preventing the Sheriffs Department from
transferring the existing 42 San Bruno positions to the
Treasure Island Brig and leaving the Treasure Island
Brig with insufficient staff to operate as a jail. Ms.
Mariani states in Attachment I that the Sheriffs
Department has never received full funding to operate the
Treasure Island Brig and all other jails in the system at
full capacity at the same time. Ms. Mariani further
advises that the Treasure Island Brig is a very labor-
intensive jail and that operating San Bruno Jail No. 3 at
full capacity is more cost effective than transferring
inmates to the Treasure Island Brig. As stated previously,
the Sheriffs Department had originally made plans to
operate a full-time jail at the Treasure Island Brig in
anticipation of the United States District Court requiring
a reduction in the number of inmates at San Bruno Jail
No. 3, which ultimately was not necessary.
BOARD OF SUPERVISORS
BUDGET ANALYST
LI
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
However, in order to meet staffing requirements outlined
by the United States District Court's ruling against the
Sheriffs Department, the Sheriffs Department
reassigned to the San Bruno Jail No. 3 the 24 new
positions originally approved in Fiscal Year 1997-1998 for
the Treasure Island Brig. As a result, the Sheriffs
Department expended only $223,756 of its Fiscal Year
1999-2000 budget of $5,195,625 for the Treasure Island
Brig. Ms. Mariani advises that the remaining balance of
$4,971,869 was used: (a) to fund the existing 42
employees that were intended to be transferred to the
Treasure Island Brig but instead remained at San Bruno
Jail, (b) to fill the 24 positions approved in Fiscal Year
1997-1998 for the Treasure Island Brig, but now needed
at the San Bruno Jail No. 3. Ms. Mariani advises that any
additional salary savings realized from position vacancies
was_used to fund" dencitsin other accounts in the Sheriffs
Department's budget.
7. Ms. Mariani states in Attachment I that:
"...While the jail population has leveled off over
the past year, it is again on the increase. We
cannot predict the size of our jail population in the
future and we will not have a new jail facility [to
replace the San Bruno Jail No. 3] for at least three
years. Therefore, it is only prudent that we protect
the investment the City has made in [the Treasure
Island Brig] as a hedge against future population
increases. It is also insurance against another
Federal lawsuit should the jails become
overcrowded during this period."
Ms. Mariani advises that, at this time, the Sheriffs
Department will take advantage of using the Treasure
Island Brig for training, which will be greatly enhanced
by having access to actual jail cells. Ms. Mariani reports
that due to the County's large inmate population, which
currently consist of approximately 1,900 inmates in the
City's eight jails, the Sheriffs Department has no other
vacant jail space available for training. Prior to the
Sheriffs Department beginning to use the Treasure
Island Brig for training purposes in Fiscal Year 1999-
2000, the Sheriffs Department was required to hold
BOARD OF SUPERVISORS
BUDGET ANALYST
48
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
training in a conference room located in City-owned office
space at 555 7th Street. Ms. Mariani notes that this
conference space does not meet the Sheriffs Department's
training needs because it is particularly important for
newly-hired officers to gain training experience in a
actual jail facility as opposed to using a simulated
environment. In addition, the Sheriffs Department will
have access to the Treasure Island Brig to house prisoners
during emergencies.
8. The proposed sublease states that both the City and the
Treasure Island Development Authority "...may
terminate this Sublease prior to the Expiration Date [of
May 15, 2005] by giving to the other party written notice
of intent to terminate the Sublease one year prior to the
intended date of termination."
9. According to Mr. Proud, the Treasure Island
Development Authority hired a private firm, Clifford
Associates, to appraise the value of the subject Treasure
Island Brig facility. On July 21, 2000, the appraiser
determined that the fair market rent for the Brig facility
would be $1.1 million per year. Mr. Proud advises that
the Treasure Island Development Authority has agreed to
charge the Sheriffs Department an annual rent of
$250,000, or 22.7 percent of the Brig's annual rental
market value, since the Sheriffs Department will only be
authorized to use the Brig facility for 90 days, or
approximately one-fourth of a year, per year for training
purposes. Mr. Steve Alms of the Real Estate Division of
the Administrative Services Department has reviewed the
appraisal of the Brig facility commissioned by the
Treasure Island Development Authority and agreed that
the rent charged to the Sheriffs Department represents
fair market value.
10. The subject sublease states that the Sheriffs
Department:
"...shall not permit any inmates to be housed at
the premises who have a known record of violent
behavior, including without limitation, a known
record for murder, manslaughter, assault, battery,
rape, or sexual molestation. Subtenant [Sheriffs
Department] shall not permit any portion of the
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
Premises to be used as a shooting range by any of
tbe Subtenant's peace officers, personnel, or
invitees. Subtenant acknowledges that there are
residential dwellings and a public elementary
school in the general vicinity of the Premises, and
Subtenant agrees to use good faith efforts to
prevent any interference with such residential and
public school activities by Subtenant's use of the
Premises."
Mr. Proud advises that the Treasure Island Development
Authority plans to give residents on Treasure Island 30
days notice of any plans of the Sheriffs Department to
house inmates in the Brig facility in non-emergency
situations. In addition, Ms. Mariani advises that the
training to be conducted at the Brig by the Sheriffs
Department will not involve any live ammunition or
chemical_agents^
11. Under the proposed sublease, the Sheriffs
Department indemnifies the Treasure Island
Development Authority and the Navy, as Master
Landlord, and their agents and employees as defined in
the lease. The proposed sublease states:
"Subtenant [Sheriffs Department], on behalf of
itself and Subtenant's Agents, covenants and agrees
that the Indemnified Parties [described above] and
Master Landlord shall not be responsible for or
liable to, and, to the fullest extent allowed by any
Laws, Subtenant hereby waives all rights against
the Indemnified Parties and releases them from,
any and all Losses, including, but not limited to,
incidental and consequential damages, relating to
any injury, accident or death of any person or loss or
damage to any property, in or about the Premises,
from any cause whatsoever, including without
limitation, partial or complete collapse of any
improvements on the Premises due to an
earthquake or subsidence, except only to the extent
such Losses are caused by the negligence or willful
misconduct of the Indemnified Parties."
According to Mr. Donnell Choy of the City Attorney's
Office, the indemnification provision contained in the
BOARD OF SUPERVISORS
BUDGET ANALYST
REVISED 2/23/01
Item 5 - File 01-0145
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
sublease is standard in all subleases entered into by the
Treasure Island Development Authority with any entity
wishing to sublease property on Treasure Island. Mr.
Choy advises that if there were another large earthquake
comparable to or greater in magnitude than the 1989
Loma Prieta Earthquake during the term of this sublease,
the City would not be able to look to the Treasure Island
Development Authority to recover any losses arising
therefrom, according to Mr. Choy. Mr. Choy advises that
when the City is acting as the landlord in its own leases,
the City includes similarly broad indemnification
provisions in its leases.
12. In summary, the Budget Analyst notes the
following: (a) since Fiscal Year 1997-1998, the Sheriffs
Department has expended a total of $1,099,409
(Attachment II) in capital expenditures to convert the
T-rpa-si-vrP-T-sl a-nH-Rr-fg- -i-nf.n- a j a i 1 nsah1e-hy-t,hA-T,ity^-(b)
the Sheriffs Department originally intended to house
approximately 130 to 140 inmates at Treasure Island
Brig in an effort to relieve overcrowding at the San
Bruno Jail No. 3; (c) in order to staff the converted
Treasure Island Brig, the Sheriffs Department received
24 new positions during Fiscal Year 1997-1998; (d) the
Sheriffs Department was also budgeted funds to
operate the Treasure Island Brig as a full-time jail,
including $5,173,526 in Fiscal Year 1998-1999 and
$5,195,625 in Fiscal Year 1999-2000; (e) however,
because the Treasure Island Brig configuration is such
that its operation is more labor-intensive than other
City jail facilities, the Sheriffs Department was unable
to operate the Treasure Island Brig due to staffing
limitations and, therefore, expended the additional
funds elsewhere in the City jail system to compensate
for an increase in the prisoner population; (f) by
requesting that the Board of Supervisors approve the
subject sublease of the Treasure Island Brig, the
Sheriffs Department is now proposing to use the
Treasure Island Brig for the alternative purpose of
training officers and maintaining space for emergency
overflow housing of inmates.
Recommendation: Approval of the proposed resolution is a policy matter for
the Board of Supervisors.
BOARD OF SUPERVISORS
BUDGET ANALYST
City and County of San Francisco
OFFICE OF THE SHERIFF
Attachment I
i?aze 1 ot 2
Michael Hennessey
SHERIFF
415-554-7225
February 20, 2001
Ref. No.: CFO 01-002
TO: Budget Analysts Office
FROM: Jean M. MarianiJChief Financial Officer
=Si^^eff==tea^e-ijftrT5Tf*5a5ure Island Brig
During 1997, the City was under a federal court order to resolve jail
overcrowding and conditions at County Jail #3 in San Bruno. In
conjunction with the Mayor and the City Attorney, the Sheriff proposed
opening the Treasure Island Brig to reduce the population at CJ#3 as
part of the settlement of the lawsuit. The Board of Supervisors
approved a supplemental appropriation that year, anticipating
occupancy of the Brig sometime in the following fiscal year (see Lt.
LaVigne's February 9, 2001 memorandum for a discussion of the
capital improvements related to the facility).
When the final draft of the settlement was presented to the court, use
of the Treasure Island Brig to house prisoners was not included.
However, greatly increased staffing at CJ #3 was part of the
settlement, so the staff approved for TI were assigned to CJ #3
instead.
Because the jail population was continuing to increase during that
time, we were concerned that we would have need of the Brig for
overflow purposes. We do not have other appropriate vacant space for
housing prisoners. In those instances in the past where we have had
significant and serious overcrowding, the Sheriff has been forced to
release prisoners from custody early (or rent space in Alameda
County's jail, now unavailable).
RCOM 456. GTY HAUL
1 OR. CARLTON a. QaoOLETT 7LACS
SAM FHAMCISCO, CA »4103
Kuc.'dixl fuptr
FA* 4 15 • S6-» - 7CS0
Attachramt I
Page lofl
While the jail population had leveled off over the past year, it is again
on the Increase. We cannot predict the size of our jail population in the
future and we will not have a new jail facility (to replace CJ #3) for at
least three years. Therefore, it is only prudent that we protect the
investment the City has made in this facility as a hedge against future
population increases. It is also insurance against another federal
lawsuit should the jails become overcrowded during this period.
In the Interim, the Sheriff's Department has taken advantage of the
facility for training. State training standards for deputy sheriffs require
four to six weeks of core training in jail management techniques
before working in a jail, as well as 24 hours of annual training for
continuing certification. Having actual jail cells available enhances
training in cell removal techniques, etc.
We have used the Treasure Island Brig for prisoners twice, during the
2000 millennium weekend, to free upspace at the 425-7^ St. jail in
=eas^tr^reiveremTras3_aTrests, and for a multi-jurisdiction mass-arrest
coordination site with the U.S. Marshal and the FBI.
The attached spreadsheet presents the Sheriff's Department
expenditures to date for the Treasure Island Brig. Our estimated
annual costs, including lease, utilities, and maintenance expense, are
approximately $373,620. The Mayor's Office included and the Board of
Supervisors approved $260,871 for this lease payment in our 2000-01
budget.
In 1997-98 and 1998-99, the Sheriff's Department budget included
appropriations of $1,699,955 and $5,989,987 for operating the
Treasure Island Brig. In 1999-00, we combined the TI Brig budget with
the San Bruno budget, and used the vacant positions in the TI budget
to meet the terms of the federal court settlement. The TI Brig Is a very
labor-intensive jail, less cost-effective to operate than the Sheriff's
other facilities. The Sheriff has never received full funding to operate
the TI Brig and all other jails in the system at full capacity. The
funding levels presumed partial closure of several floors of CJ #3, and
a transfer of those Inmates and deputies to TI.
90 "d 1U101
Attachment II
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Attachment III
Page 1 ot 2
San Francisco Sheriffs Department
INTER-OFFICE CORRESPONDENCE
Sheriffs Bureau of Building Services
Attn: Ms. Jean Mariani VjjQf) Friday, February 09, 2001
From: Lt Michael La Vigne M£-£^ —
Subj: Capital Improvements at me Treasure Island Brig
The following is a short history and accounting of the capital improvements the 3FSD has
made to date at the Treasure Island Brig.
1 996 - In anticipation of the CCSF taking over the Treasure Island & Yerba Buena Island
properties from the U. S. Navy, inspections of the various buildings were performed by CCSF and
California State officials having jurisdiction. In mid 1 996 (May & June) the SFSD received copies
of seismic, building code, and fire/life safety code deficiency reports from the CCSF, California
Board of Corrections, and California Stale Fire Marshal. The SFSD also reviewed the Brig to
determine what security or operational modifications would have to be made to accommodate
prisoners.
1997 - Based upon the above surveys and reports, the SFSD developed a scope of work to
correct the code, security and operational issues. From this scope of work a capital budget was
developed and submitted to the CCSF as supplemental budget request in August of that year. This
supplemental budget request, along with an ordinance permitting the SFSD to contract for the
work, was approved by the CCSF Board of Supervisors in November 1997. The scope of work
was divided into three basic contracts as indicated below:
Electronic Security System Improvements:
Scope: Replace central control panel, add CCTV cameras and monitors, repair and replace locks
and moving gates.
Cost: $240,000
Time: January- April 1998
Prisoner Exercise Yard Improvements:
Scope: Replaces old fencing with new double security fence and paves over gravel exercise yards.
Cost: $340,000
Time: July - November 1 998
Page 1 of 2
Attachment III
Page Zot Z
Fire/Life Safety Upgrades:
Scope: Replaces old fire alarm system, apply spray-on cementitious fire proofing on underside of
roofs and roofing supports, replaces several doors and frames with code compliant
assemblies, remodels paths of travel to provide clear fire exit routes, and upgrades and
expands the fire sprinkler system-
Cost: $500,000
Time: September 1998 -March 1999
In addition to the above, the SFSD has made improvements to the temperature control system of
the Brig, as well as installed some kitchen equipment
The CCSF still has some disability access issues at the Brig, but at this point we have closed out
all construction contracts, and any disability access issues would be addressed in the future.
If you have any questions, please calL
Page 2 of 2
56
"Memo to Finance Committee
February 28, 2000 Finance Committee Meeting
Item 6 - File 01-0270
Item:
Amount:
Source of funds:
Description:
Comments:
Supplemental appropriation ordinance in the amount of
$100,000 for earthquake relief to India.
$100,000
General Fund Reserve
According to recent news reports, on January 26, 2001 an
earthquake measuring 7.9 on the Richter scale occurred
in India killing over 19,000 persons and leaving
thousands homeless. The proposed supplemental
appropriation would commit $100,000 for disaster relief in
India.
According to the Office of the Sponsor of the proposed
ordinance,, the proposed supplemental appropriation of
$100,000 to India would be coordinated with the Indo-
American Trade and Commerce Council's Gujarat
Earthquake Relief Fund for FY 2000-01.
According to Mr. Steve Kawa of the Mayor's Office, the
disaster relief contribution would be disbursed through
the Mayor's Office of Economic Development (MOED). Mr.
Kawa adds that MOED would be responsible for assuring
that the funds are contributed to the Indo-American
Trade and Commerce Council Relief Fund and used for
the intended purpose of providing relief for the India
earthquake victims.
1. On February 5, 2001, the Board of Supervisors
approved a resolution (File 01-0176) expressing sympathy
and concern for the earthquake victims in western state of
Gujarat, India, extending condolences to family members
of those who have passed away and urging President
Bush, the United States Senate and the House of
Representatives to use all available resources and funds
to augment and expedite existing relief efforts to
earthquake victims and their families.
2. In October of 1999, the Board of Supervisors approved
an appropriation of $250,000 for earthquake relief efforts
in the City of Taipei. Also, in 1995, $50,000 was
BOARD OF SUPERVISORS
BUDGET ANALYST
TMemo to Finance Committee
February 28, 2000 Finance Committee Meeting
appropriated by the Board of Supervisors for earthquake
relief in the City of Osaka following the Kobe earthquake.
3. On February 21, 2001, the Finance Committee
recommended approval of a supplemental appropriation
of $100,000 for earthquake relief in El Salvador (File 01-
0272).
Recommendation: Approval of the proposed ordinance is a policy matter for
the Board of Supervisors.
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
Item 8 -File 01-0223
Department:
Item:
Amount:
Source of Funds:
Description:
Department of Public Health (DPH)
Resolution endorsing the transfer of State General Fund
monies, previously allocated to the DPH, to the California
Mental Health Directors Association for a contract to
provide services to foster care and other Medi-Cal eligible
children who are residents of San Francisco but are
placed in facilities outside of San Francisco.
$48,330
State of California General Fund
In FY 1999-2000, the DPH began participating in a
Statewide contract with other counties for the provision of
mental health .services -to", children placed in out-of-county-
foster care facilities. The California Mental Health
Directors Association (CMHDA), a nonprofit organization
comprised of mental health directors Statewide, entered
into a contract with a Statewide Administrative Services
Organization (ASO), a private behavioral health
organization, in November of 1999, to provide mental
health referral services for children placed in out-of-
county foster care facilities. Under the current Statewide
contract with ASO, a foster parent, requesting mental
health services for a child residing in San Francisco to be
placed in an out-of-county foster care facility, would not
require prior DPH authorization as was previously
required. Instead, the contractor, ASO, would be
authorized to provide a mental health referral directly to
the foster parent.
Under the ASO contract, the ASO would pay the mental
health provider directly for the mental health services
provided to foster care and other Medi-Cal eligible
children and would receive reimbursement from CMHDA,
including provider payments and administrative fees
under the contract term period of November 1, 1999
through June 30, 2001.
Under the proposed resolution, San Francisco's DPH
would transfer to CMHDA $48,330 of the State General
BOARD OF SUPERVISORS
BUDGET ANALYST
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
Fund monies previously allocated for distribution to San
Francisco for such mental health services for FY 2000-01.
These subject State General Fund monies would be used
to reimburse CMHDA for payments made to the ASO for
mental health services to be provided to foster care and
other Medi-Cal eligible children who are residents of San
Francisco but who are placed in facilities outside of San
Francisco. According to Dr. Albert Eng from the DPH, the
DPH, and not the State, determines the amount of State
General Fund monies to be transferred to the CMHDA to
contract with the ASO to provide services to foster care
and other Medi-Cal eligible children placed outside of San
Francisco. Dr. Eng estimates that the proposed transfer
of $48,330 will be more than sufficient to cover the costs
of mental health services provided to foster care and other
Medi-Cal eligible children placed outside of San Francisco
for FY 2000-2001.
In addition, San Francisco is eligible to receive $51,670 in
Federal matching funds in FY 2000-01 for total funding of
$100,000 ($48,330 State General Fund monies + $51,670
Federal matching funds) for the mental health services
provided to children placed in out-of-county foster care
facilities.
Comments: 1. According to Dr. Eng, the purpose of transferring the
subject State funds in the amount of $48,330 from the
State to the CMHDA, to provide reimbursement for the
subject services, is to facilitate access to mental health
services for foster children placed in out-of-county foster
care faculties.
2. Dr. Eng states that the proposed transfer by DPH of
State funds, previously allocated to the DPH, to the
California Mental Health Directors Association would
facilitate the authorization and reimbursement process
for mental health services provided to children placed in
out-of-county foster care facilities, and that the transfer of
such funds would not result in any additional costs to San
Francisco. The current contract with CMHDA for
coordination with ASO will expire on June 30, 2001. Dr.
Eng, anticipates that the contract with CMHDA would be
renewed.
BOAKD OF SUPERVISORS
BUDGET ANALYST
60
Memo to Finance Committee
February 28, 2001 Finance Committee Meeting
Recommendation: Approve the proposed resolution.
Harvey M. Rose
Supervisor Leno
Supervisor Peskin
Supervisor Gonzalez
Clerk of the Board
Controller
Steve Kawa
BOARD OF SUPERVISORS
BUDGET ANALYST
A 2 l-
i HOI THEN j
HINDI l<1 I IP
UTICMJMAHA NE ,
2004